Learn more about MCX Margin Calculator for Risk Management
The Multi Commodity Exchange of India Limited (MCX) is a commodity derivatives exchange. It is India’s first listed exchange having state-of-the-art facilities for online trading. You can also clear and settle commodity derivatives transactions. This provides a platform for risk management. The exchange began operations in November 2003 operates under Securities and Exchange Board of India.
Diverse types of MCX margins for transactions
One uses the MCX Margin Calculator to determine the margin for commodities. Margins imposed over and above the other margins is known as the additional margin. This can be imposed on both the long side and the short side. When the margins are imposed only on one side, either the short or the long side, they are known as the special margin. The tender period margin continues up to the expiration of the contract.
These are imposed as percentages that are defined as per the product specifications. You can impose such margins on the buy and sell side for outstanding transactions. One applies them on an incremental basis. They release the Tender Period Margin for the position when they impose the Delivery Period Margin.
Margins applicable on delivery
The contract will enter the delivery period toward the end of its lifecycle. When it does the delivery period margin is imposed. Such margin will become applicable until the settlement of the delivery obligation for all outstanding transactions on the buy and sell sides.
The position of the seller becomes settled when he submits the delivery documents. This must be accompanied by the surveyor’s certificate. Once this takes place, to the suitable extent the delivery period margin is reduced. Similarly, the buyer will pay money for the delivery allocated to him. For that quantity for which he has paid the amount, the delivery period margin will stand reduced.
Extreme loss margin (ELM) comes into play when a loss is expected in a situation. This would lie outside the coverage of the SPAN based initial margin.
MCX is the leader in India
MCX offers trading in many commodities. These futures contracts are spread out among agricultural commodities, energy, industrial metal, and bullion. The Exchange reaches across the nation and includes many registered members and Authorised Persons. The main focus of the Exchange is to provide a neutral, transparent, and secure trade mechanism. The commodity value chain participants participate in the transactions and the MCX enforces trade regulations and quality parameters according to the regulatory framework. MCX is the leading commodity derivatives exchange in India. It has a market share of 89.9% when you consider the value of the futures contracts of commodities traded in the first quarter.
The exchange aims to further its interests by nurturing communities that help in its growth. Its collaboration partners include the India Post and the Gramin Suvidha Kendra. They have a social inclusion programme and one to enhance the value for the farmer in his agricultural activities.
MCX is always furthering product development through continuous research. Innovation and use of information in a useful manner and combining it with capable leadership helps them raise the operating bar high above their competitors.