December 24, 2020
57

Crude Oil Contracts Initial & Additional Margins - Slashed!

In its recent circular, MCXCCL has reviewed the Risk Management Measures for Crude Oil Contracts. Here is a quick synopsis of the key highlights which will come into effect from Dec 23, 2020:

  • Reduction in Initial Margins:
    For all existing and to be launched Crude Oil contracts, Minimum Initial Margin / Short Option Minimum Margin revised from 100% to 50%
  • Additional Margins Withdrawn:
    Withdrawal of Additional Margin of Rs. 1,00,000 (near month) and Rs.50,000 (other expiries) levied on Crude Oil Futures contracts and on Short Side of Crude Oil Options contracts.

Consider this Example for better understanding: For a CRUDEOIL FUT 19JAN21

Current priceRequired Margin
Before Dec 23, 2020		Required Margin
From Dec 23, 2020 Onwards
Rs. 3420Rs. 4,46,275

Rs. 3,42,000
(Initial 100% margin)
+
Rs. 1,00,000
(Additional Margin)
+
Rs. 4,275
(1.25% Extreme Loss Margin)		Rs. 1,75,275

Rs. 1,71,000
(Initial 50% margin)


+

Rs. 4,275
(1.25% Extreme Loss Margin)

For more details, please refer the MCX Circular.

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