MCX to launch natural gas options contracts from Jan 17

The Multi Commodity Exchange of India Limited (MCX), a commodity derivatives exchange, has received market regulator SEBI’s approval for launching options trading on Natural Gas (1,250 MMBTU) futures.

Two contracts expiring on February 21, 2022 and March 24, 2022 will be available for trading from January 17, 2022. On expiry, the first contract will devolve in futures on February 22, said MCX in a notification.

The underlying security will be Natural Gas Futures contract traded on MCX. The trading period will be during the weekdays. The settlement period is T+1 day. The commodity exchange said that the premium of buyer will be blocked upfront on real time basis.

The margins shall be computed using SPAN at the begin of the day, 9.30 am, 11.00 am, 1.00 pm, 3.00 pm, 5.00 pm, 7.00 pm, 8.30 pm, 10.30 pm and at the end of the day. You are requested to maintain enough margin for the trade to be executed and avoid any penalty due to any margin shortfall.

The maximum allowable position for individual clients is 120,00,000 MMBtu or 5% of the market wide open position, whichever is higher for all Natural Gas Options Contracts combined together. Meanwhile, for a member collectively for all clients is 12,00,00,000 MMBtu or 20% of the market wide open position, whichever is higher for all Natural Gas Options Contracts combined together.

The contract launch calendar for Natural Gas Options during the year 2022 is given below.