MCX Margin/Investment
Margin is the deposit money that needs to paid to buy or sell each contract of a commodity in MCX exchange.Margin, as used in futures trading, is a good faith deposit of cash.
MCX Margin levels are set by the MCX Exchange based on volatility(Market conditions) & can be changed at any time.Margin is required to trade in MCX ,it s like Investment to put to trade
MCX Margins are differ from commodity to commodity.The margin requirement for MCX commodities trading range from 5 % to 20 % of the value of a contract with a minimum of 5%,except for MCX Gold where the minimum margin is 4 %.
Initial Margin
Margin is the deposit money that needs to paid to buy or sell each contract of a commodity in MCX exchange.Margin, as used in futures trading, is a good faith deposit of cash.
MCX Margin levels are set by the MCX Exchange based on volatility(Market conditions) & can be changed at any time.Margin is required to trade in MCX ,it s like Investment to put to trade
MCX Margins are differ from commodity to commodity.The margin requirement for MCX commodities trading range from 5 % to 20 % of the value of a contract with a minimum of 5%,except for MCX Gold where the minimum margin is 4 %.
Initial Margin
The amount that must be deposited by a person at the time
entering in to MCX trading as called Initial margin. This margin fixed by the
MCX Exchange &its mandatory requirement for parties who are entering in to
the contract. This margin meant to cover the potential loss in one day.
Additional Margin
In addition to Initial margin ,additional margins can be levied
by the MCX exchange.In case of sudden higher than expected volatility, MCX
exchange calls for an additional margin which is preemptive move to prevent to potential
default. This is imposed when one commodity extremely volatile, that time it
has been put by the exchange/regulator to avoid adverse situation.
MTM
MTM is Mark to Market(MTM)MTM which happens on a continuous basis at the end of each day.Daily mark to market settlement is done till the date of contract expiry.
When open position held, this MTM be levied for price fluctuations of everyday.The Margin account is adjusted to reflect the investor’s gain (or)loss depending upon the closing price of the commodity in a day. MTM calculated until covering/closing the open position in MCX.
MTM Settlement
MTM calculated until covering/closing the open position in MCX.Payment made for that MTM trade is called settlement.
Calculation Of MCX Margin/How to Calculate MCX Margin
Long
Long means Buy,When Traders are in buying position they called their Buy as Long.
Short
Short Means Selling,When Traders are having Sell Position,they called their Sell as Short.
BID
Bid (also called the Buy Price) is the price at which an investor accepts to buy a contract.
Ask
Ask (also called the Offer price) is the price at which an investor accepts to sell a contract.
Lot/Contract
Lot also called as contract. A term of reference describing as unit of trading for a commodity. A demand for additional funds because of adverse price movement.
MTM
MTM is Mark to Market(MTM)MTM which happens on a continuous basis at the end of each day.Daily mark to market settlement is done till the date of contract expiry.
When open position held, this MTM be levied for price fluctuations of everyday.The Margin account is adjusted to reflect the investor’s gain (or)loss depending upon the closing price of the commodity in a day. MTM calculated until covering/closing the open position in MCX.
MTM Settlement
MTM calculated until covering/closing the open position in MCX.Payment made for that MTM trade is called settlement.
Long
Long means Buy,When Traders are in buying position they called their Buy as Long.
Short
Short Means Selling,When Traders are having Sell Position,they called their Sell as Short.
BID
Bid (also called the Buy Price) is the price at which an investor accepts to buy a contract.
Ask
Ask (also called the Offer price) is the price at which an investor accepts to sell a contract.
Lot/Contract
Lot also called as contract. A term of reference describing as unit of trading for a commodity. A demand for additional funds because of adverse price movement.
Speculator
A trader, who trades or takes position without having exposure in the physical market, with the sole intention of earning profit is a speculator.
Open Interest
Open Interest is the total number of futures contracts Position that are not closed or delivered on a particular day. Open interest is NOT the
same thing as volume of futures trades.
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