MCX stands for Multi Commodity Exchange, a demutualised nationwide electronic commodity futures exchange. Financial Technologies (India) Ltd sets up MCX. In 2003, MCX was founded and in November started operations. MCX is headquartered in Mumbai. Futures trading in Agricultural Commodities and in more than 40 commodities from various market segments such as Bullion, Ferrous & Non-ferrous metals, Pulses, Oils & Oilseeds, Energy, Plantations, Spices and other soft commodities are offered by MCX. Three ISO certifications have been achieved by MCX, these ISO certifications are ISO 27001:2005 – for information security management systems, ISO 14001:2004 for environment management systems, and ISO 9001:2000 for quality management.
Screenshot of the homepage of MCXIndia.com
The exchange tries to be at the forefront of developments in the commodities futures industry and forged strategic alliances with various leading International Exchanges, including Tokyo Commodity Exchange, London Metal Exchange, New York Mercantile Exchange, Bursa Malaysia Derivatives, Berhad and others.
For launching/commencing new futures Commodity/Contract, the Base price is a used as reference. Daily price range is adjusted on the basis of that. The Exchange operates on all days excluding, Sundays and Exchange specified holidays. For each calendar year, a list of holidays is notifies by the Exchange in advance. For all commodities, which are launched by MCX, trading period is open from Monday to Friday at 10.00am to 5.00pm, on Saturday trading priod is open at 10.00am to 2.00pm, and in winter, for All commodities except agri commodities and Sponge Iron, trading period is open from Monday to Friday at 5.00pm to 11. 55pm and in summer at 5.00pm to 11.30pm.
There are two types of orders in the trading system such as Regular order and stop loss order. With market price or limit price, Regular orders can be placed in the system. According to its conditions, regular orders are limit order, market order. Stop loss Order, which are kept by the system in suspended or abeyance mode and is activated only on trigger of a price, as defined by the member. Orders can be classified according to such periods End of the session (EOS), Good till date, Good till cancel, Immediate or Cancel (IOC), and Day Order. There are two types of position in trading, long position and short position. Long position is used in buying a contract and short position is used in selling a contract.
Different terms in contract specifications:
Trading unit: To buy or sell a contract, the Trading unit is the minimum quantity e.g. If a member is buying 1 lot of cardamom, he has to buy minimum 100kg of cardamom given trading unit of 100kg.
Quotation / Base value: It is the Quantity in Lot or Weights for which the prices are quoted for online trading on TWS e. g. If the quotation or base value for Gold contract is given as 10 grams and the price available for trading on TWS is 8000, that price is for 10 grams of the Gold.
Maximum order size: Maximum order size is the utmost no. of lots that can be bought or sold in one Single order. The maximum order size of each commodity is given in its contract specifications.
Tick Size: Tick size is the minimum price difference between the bids and asks for a particular contract. The tick size is given in the contract specifications.
DPR: Daily Price Limit i.e. circuit filter limit is the percentage of variation allowed in the price of a commodity in a day with respect to the previous day’s close price for the day
DDR: Due date rate is final settlement price for particular future contract and calculation process called computation of DDR.
Clients can modify their client code from “Trade” menu. For modification or cancellation of your orders, go to “Order” menu, click on Order Book and select view status as pending, select the pending order to be modified, and select the option ‘Modify’ or ‘Cancel’ option. A member can restrict his user from trading in specific commodity /contract by disallowing the commodity /contract in Contract Basket. Turnover limit is at user level and not at member level. Turnover limit can be calculated by addition of Traded Value and pending orders. Members can download circulars issued by the Exchange from Extranet (FTP) server as well as MCX website i.e. www.mcxindia.com.
Note: if user enters wrong username or password for more than 5 times, then his user ID get locked.