Crude Oil Price: MCX margin money raised up to 200 pct on short-selling positions
Crude Oil Price MCX: In view of the increased volatility in Crude Oil contracts, the Multi Commodity Exchange has raised the MCX crude margin money on light sweet crude oil future contract to 100 per cent for those who want take a buy position.
Crude Oil Price MCX: In view of the increased volatility in Crude Oil contracts, the Multi Commodity Exchange (MCX) has raised the MCX crude margin money on light sweet crude oil future contract to 100 per cent for those who want take a buy position in the crude oil future contract while for those who want to take short position in the oil future contract, the margin money required will be 200 per cent now. The MCX informed about the decision in a written statement yesterday evening after the closure of the Commodity markets in India.
The MCX issued a press note in regard to the new guidelines on MCX crude oil contract that said, "An initial margin of 100 per cent shall be levied for all existing and yet to be launched Crude Oil contracts. Minimum Initial margin of Rs 95,000/- per lot shall be levied. An additional margin of Rs 1,00,000 per lot shall be levied on near month Crude Oil Futures contract and on short side of near month Crude Oil Options contract. Further, an additional margin of Rs 50,000/- per lot shall also be levied on all other Crude Oil Futures contracts and on short side of Crude Oil Options contracts (including yet to be launched Crude Oil contracts)."
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MCX press note went on to add that based on the price movement, further additional margin over and above the aforesaid margin shall be levied. The criteria for the same is as under:
1] If the price of the crude oil falls between 50 per cent to 75 per cent, (previous close compared to current price of the contract at MCX / NYMEX) then an additional margin of 50 per cent of the MTM would be levied.
2] If the price of the crude oil falls between 75 per cent to 90 per cent, (previous close compared to current price of the contract at MCX / NYMEX) then an additional margin of 100 per cent of the MTM would be levied.
3] If the price of the crude oil falls beyond 90 per cent, (previous close compared to current price of the contract at MCX / NYMEX) then an additional margin of 125 per cent of the MTM would be levied.
Commodity experts are of the opinion that MCX had to take this action after the debit crisis that plagued the brokers when the WTI crude oil price went below $0 per barrel.
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