MCX Futures Margins- Daily commodities Futures Margins
MCX Futures margin files are daily updated based on the volatility in the underlying commodity. These are applicable for commodities futures traded on Multi Commodity Exchange of India (MCX). Traders find change in margin percent has lot of effect on their trading positions. At times they may be compelled by their brokers for lack of sufficient margins in their trading account. It is important to know how much margin one need to maintain to take a position.
Many brokers allow leveraged position while trading in commodities. One must understand the risk in this practice. Even some of the most reputed brokers are allowing 2-3 times limit to survive from competition from small brokers. What one must understand about mcx margins while trading in commodities is, these margins are calculated using most advanced parameters and indicate the possible risk.
Usually, Initial Margins are very small in the range of 5-10 percent. Unlike Futures Margins on NSE (Equities) there are additional margins like Additional Buyer Margin and Additional Seller Margin. Along these, commodities futures margins also include Special buyer margin and Special Seller Margins. These are additional margins to contain risk and are imposed on special circumtances when there is huge volatility or when some highly speculative moves are noticed (Do you remember Gaurgum …)
It is imperative for traders to follow strict risk management, if they need to stay in the business of trading for long term. One may temporarily make profits by taking excess margins in commodities, but it will be short lived. In a short span of time, there is high probability to incur more losses than profits. Then, the question is why brokers allow high leverage? It is due to pressure from traders and to survive in the business.
MCX Daily margins also give an indication of risk that particular commodity carry. If margins on any commodity are increasing, it is due to increased volatility and one need to plan their trades accordingly. To succeed in trading in commodities, one need to strictly observe disciplined trading and strict risk management. To stay in the business of trading in commodities, do not take leveraged positions while trading. On the other hand, be conservative in taking positions on your capital.
|Symbol||Expiry Date||Price||Multiple||I.M||S.B.M||S.S.M||A.M.L||A.M.S||T.B.M||T.S.M||I.C.V||Buy Margin||Sell Margin|
Margin files are updated in the above format in the link at the top of the page. Commodities margins on both MCX and NCDEX are different for each expiry date. Usually, Near month commodities futures (MCX Futures Margins) have lower amount than further expiry months.
Multiple indicates how much the commodity move for one rupee change. For example multiplier of copper is 1000 which indicates, it moves 1000 rupees in value (Gain/Loss) for each one rupee change in copper contract.
MCX futures margins must be taken into consideration while taking positions so that one is not compelled to close their positions just due to lack of sufficient margins.
Click Here for MCX Futures Daily Margins