MCX slaps margins to reduce volatility and settlement crisis

Notwithstanding the historic rise and fall of stock prices in the last two days, the Multi Commodity Exchange (MCX) as a preemptive move has imposed additional and special margins on several commodities to reduce volatility and mitigate settlement crisis.

Notwithstanding the historic rise and fall of stock prices in the last two days, the Multi Commodity Exchange (MCX) as a preemptive move has imposed additional and special margins on several commodities to reduce volatility and mitigate settlement crisis.

NCDEX has also put up a detail list on the price limit of commodities on its website. ‘‘FMC keeps prescribing price limit for commodities on different occasions. The present circular is only a consolidated list to keep the traders abreast of the price limitations. Apart from price limits we have inbuilt special margins within our contracts,’’ said Jaideep Sen, head, risk management, NCDEX.

Apart from the initial and special margins, an additional margin of 5 per cent has been imposed on members having net short positions in their account as well as their clients account in all contracts of aluminium, copper, silver, silver mini, silver HNI and zinc.

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The total MCX margins applicable on various contracts are as under: The total total margin on aluminium and copper are 10 per cent and 15 per cent respectively.

The total margin is 8 per cent each on Brent crude oil and crude oil. For gold, gold HNI and gold mini, the total margin will be 10 per cent each.

Silver HNI and silver mini will attract 13 per cent and 18 per cent margins respectively. For zinc it is 12 per cent and 17 per cent. In addition to the initial and additional margins of 5 per cent, MCX has levied a special margin of 2 per cent on cumin seed (jeera) and mentha oil.

The margin was calculated at the end of the trading hours on May 22 and would be blocked from the available deposits of the member.

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