A 

commodity exchange is a place where various commodities and derivatives are bought and
sold.Commodities exchanges usually trade on commodity futures.
Reasons for trading in Commodity Exchanges:
Hedging: Commodities are subject to constant and extreme price fluctuations. Traders are the worst
sufferers of the price risk. Forward contracts have come to their rescue.
A forward contract requires a buyer and a seller to take and make a delivery of a definite quantity of a
particular commodity at a future specified date. Such contracts are traded on an exchange, which
provides guarantee for all futures dealings, and parties can "hedge" at suitable levels. Hedging lessens
risk since it involves the purchase or sale of a commodity with the intention of counterbalancing the
profit or loss of another investment. Therefore, any loss on the previous investment will be hedged, or
compensated, by a matching profit from the hedging instrument.
Speculating: Speculators are people who are prepared to bear risks in anticipation of earning profits.
Markets are granted liquidity by speculators and it is hard to conceive of a futures market devoid of
speculators.
Arbitrage: Arbitrage involves buying a commodity at a low price and instantly selling it for a higher
price in another market. Thus, traders can profit from arbitrage opportunities occurring due to price
differences between two exchanges.
Shifting of Risk: The minute a trader finalizes a deal and secures a price, he is no longer concerned
by unfavorable price shifts. For example, if a seller trades a specific contract for $ 450 and soon after
the price comes down to $440, there has been an unfavourable price shift but the seller has made a
profit of $10. At this point, the risk has been transferred to the buyer of the contract. Speculators
trade on commodities and derivatives by undertaking risks in order to maximize profits.
Information: Exchanges produce huge volumes of data that are intensely scrutinized and monitored
by a wide cross-section of people as the data provides gainful insights about the prevailing economic
conditions.
List of Exchanges in India
1. Bhatinda Om & Oil Exchange Ltd., Batinda.
2. The Bombay Commodity Exchange Ltd., Mumbai
3. The Rajkot Seeds oil & Bullion Merchants` Association Ltd
4. The Kanpur Commodity Exchange Ltd., Kanpur
5. The Meerut Agro Commodities Exchange Co. Ltd., Meerut
6. The Spices and Oilseeds Exchange Ltd.
7. Ahmedabad Commodity Exchange Ltd.
8. Vijay Beopar Chamber Ltd., Muzaffarnagar
9. India Pepper & Spice Trade Association, Kochi
10. Rajdhani Oils and Oilseeds Exchange Ltd., Delhi
11. National Board of Trade, Indore
12. The Chamber Of Commerce, Hapur
13. The East India Cotton Association, Mumbai
14. The Central India Commercial Exchange Ltd., Gwalior
15. The East India Jute & Hessian Exchange Ltd.
16. First Commodity Exchange of India Ltd, Kochi
17. Bikaner Commodity Exchange Ltd., Bikaner
 18. The Coffee Futures Exchange India Ltd, Bangalore
19. Esugarindia Limited
20. National Multi Commodity Exchange of India Limited
21. Surendranagar Cotton oil & Oilseeds Association Ltd
22. Multi Commodity Exchange of India Ltd
23. National Commodity & Derivatives Exchange Ltd
24. Haryana Commodities Ltd., Hissar
25. e-Commodities Ltd
Of these 25 commodities exchanges the MCX, NCDEX and NMCEIL are the major Commodity
Exchanges.
Multi commodity exchange of India Ltd - MCX is an independent and de-mutualised exchange based
in Mumbai. Established on 10 November, 2003, it is the third largest bullion exchange and fourth
largest energy exchange in the world. Recognized by the Government of India it deals in numerous
commodities and carries out online trading, clearing and settlement processes forcommoditie future
market countrywide.
MCX COMDEX is India's foremost and sole composite commodity futures price index
National Commodity & Derivatives Exchange of India Ltd (NCDEX) located in Mumbai, is a public
limited company incorporated on 23rd April 2003. Promoted by national level establishments it is run
by professional management. Regulated by the Forward Market Commission with reference to futures
trading in commodities, it trades in various commodities online. The NCDEX is covered by:
 Companies Act
 Stamp Act
 Contracts Act
 Forward Commission (Regulation) Act
National Multi-Commodity Exchange of India Limited (NMCEIL) is considered the first de-mutualised,
online exchange dealing in numerous commodities. Incorporated on 20th December 2001, it is
promoted and run by:
 Central Warehousing Corporation
 National Agricultural Cooperative Marketing Federation of India Limited
 Gujarat Agro Industries Corporation Limited
 National Institute of Agricultural Marketing
 Gujarat State Agricultural Marketing Board
 Neptune Overseas Limited
The Commodity Exchanges with their extensive reach embrace new participants, resulting in a
powerful price discovery process.
List of futures exchanges
From Wikipedia, the free encyclopedia

This is a list of futures exchanges. Those stock exchanges that also offer trading in futures contracts besides
trading in securities are listed both here and the list of stock exchanges.
 Contents

 [hide]

1 North America

o 1.1 Canada

o 1.2 USA

o 1.3 Mexico

o 1.4 Caribbean

2 Europe

o 2.1 Pan-

European

o 2.2 Austria

o 2.3 Belgium

o 2.4 Czech

Republic

o 2.5 Germany

o 2.6 Greece

o 2.7 Hungary

o 2.8 Italy

o 2.9 The

Netherlands

o 2.10 Poland

o 2.11 Portugal

o 2.12 Romania

o 2.13 Russia

o 2.14 Slovakia

o 2.15 Spain

o 2.16 Switzerlan

o 2.17 Turkey

o 2.18 Ukraine

o 2.19 United

Kingdom

3 Asia
 o 3.1 Bangladesh

o 3.2 Nepal

o 3.3 China

o 3.4 Hong Kong

o 3.5 India

o 3.6 Indonesia

o 3.7 Iran

o 3.8 Japan

o 3.9 Korea

o 3.10 Malaysia

o 3.11 Pakistan

o 3.12 Philippines

o 3.13 Singapore

o 3.14 Taiwan

o 3.15 Thailand

o 3.16 United

Arab Emirates

4 South America

o 4.1 Argentina

o 4.2 Brazil

5 Oceania

o 5.1 Australia

o 5.2 New

Zealand

6 Africa

o 6.1 South Africa

o 6.2 Kenya

7 See also

8 External links

[edit]North America
[edit]Canada

 Montreal Exchange (MX) (owned by the TMX Group)

 ICE Futures Canada formerly Winnipeg Commodity Exchange
[edit]USA

 CBOE Futures Exchange (CFE) (owned by Chicago Board Options Exchange)

 Chicago Mercantile Exchange (CME) (Since 2007 a Designated Contract Market owned by the CME
Group)

 Chicago Board of Trade (CBOT) (Since 2007 a Designated Contract Market owned by the CME
Group)

 Chicago Climate Exchange (CCE)

 ELX Futures (Electronic Liquidity Exchange)

 ICE Futures U.S. (Formerly New York Board of Trade or NYBOT)

 Kansas City Board of Trade (KCBT)

 Minneapolis Grain Exchange (MGEX)

 Nadex (formerly HedgeStreet)

 NASDAQ OMX Futures Exchange (NFX) (formerly Philadelphia Board of Trade or PBOT)

 New York Mercantile Exchange (NYMEX) and (COMEX) (Since 2008 Designated Contract Markets
owned by the CME Group)

 NYSE Liffe US

 OneChicago (Single-stock futures (SSF's) and Futures on ETFs)

[edit]Mexico

 Mexican Derivatives Exchange (MexDer)

[edit]Caribbean

 Caribbean Exchange Network (CXN)

[edit]Europe

[edit]Pan-European

 BlueNext

 Eurex

 Euronext.liffe

 European Climate Exchange

 OMX
[edit]Austria

 Österreichische Termin-und Optionenbörse (ÖTOB)

[edit]Belgium

 BELFOX (Belgian Futures & Options Exchange)

 NYSE Euronext - Euronext Brussels Derivatives Exchange

[edit]Czech Republic

 KBP, Komoditní burza Praha, Prague

 OTE, CO2 emmision market, Prague

 PBB, Plodinová burza Brno, agricultural products, Brno

 CMKBK, Czech Moravian Commodity Exchange Kladno, Kladno

[edit]Germany

 Risk Management Exchange (RMX), previously called Warenterminbörse Hannover (Commodity

Exchange Hannover, WTB)
[edit]Greece

 ADEX (Athens Derivatives Exchange)

[edit]Hungary

 Budapest Stock Exchange (BSE)

[edit]Italy

 IDEM (Italian Derivatives Equity Market)

[edit]The Netherlands

 ENDEX (European Energy Derivatives Exchange)

 APX Group
[edit]Poland

 WGT (Warsaw Commodity Exchange)

 GPW (Warsaw Stock Exchange)

[edit]Portugal

 BDP (Porto Derivatives Exchange)

[edit]Romania

 Bursa de Valori Bucureşti (BVB) (Bucharest Stock Exchange)

 Bursa Romana de Marfuri (BRM)

 Sibiu Monetary Financial and Commodities Exchange (BMFMS)

 Bursa de Marfuri Timisoara (BMT)

[edit]Russia

 Moscow Interbank Currency Exchange (MICEX)

 RTS Stock Exchange (RTS)

[edit]Slovakia

 Commodity Exchange Bratislava (CEB)

[edit]Spain

 Mercado Español de Futuros Financieros (MEFF)

[edit]Switzerland

 SOFFEX (Swiss Options & Financial Futures Exchange)

[edit]Turkey

 Turkish Derivatives Exchange (in Turkish: Vadeli İşlem ve Opsiyon Borsası or VOB)

[edit]Ukraine

 Ukrainian Exchange (UX)
[edit]United Kingdom

 ICE Futures Europe

 London International Financial Futures and Options Exchange  (LIFFE), precursor to Euronext.liffe

 London Metal Exchange (LME)

[edit]Asia

[edit]Bangladesh

 Bangladesh Commodity Exchange (BCE): Not yet functional

[edit]Nepal

 Nepal Spot Exchange limited (NSE)

 Mercantile Exchange Nepal Limited (MEX)

 Commodities and Metal Exchange Nepal Limited (COMEN)

 Nepal Derivative Exchange Limited  (NDEX)

[edit]China

 Dalian Commodity Exchange (DCE)

 Shanghai Futures Exchange (SHFE)

 Zhengzhou Commodity Exchange (ZCE)

 China Financial Futures Exchange (CFFEX)

[edit]Hong Kong

 Hong Kong Exchanges and Clearing (HKEx)

 Hong Kong Futures Exchange (HKFE) [merged]

 Hong Kong Stock Exchange (HKSE) [merged]

 Hong Kong Mercantile Exchange (HKMEx)

[edit]India

 National Stock Exchange of India (NSE)

 Bombay Stock Exchange (BSE)

 Multi Commodity Exchange of India (MCX)

 MCX Stock Exchange Ltd (MCX-SX)

 National Multi Commodity Exchange of India (NMCE)

 National Commodity and Derivatives Exchange (NCDEX)

 Ahmedabad Commodity Exchange (ACE)

[edit]Indonesia

 Jakarta Futures Exchange (JFX)

 Indonesia Commodity and Derivatives Exchange (ICDX)

[edit]Iran

 Iran Mercantile Exchange

 International Oil Bourse

 Tehran Stock Exchange
[edit]Japan

 Central Japan Commodity Exchange (C-COM)

 Kansai Commodities Exchange (KEX)

 Osaka Securities Exchange (OSE)

 Tokyo Commodity Exchange (TOCOM)

 Tokyo Stock Exchange (TSE)

 Tokyo Grain Exchange (TGE)

 Yokohama Commodity Exchange (Y-COM)(merged, 2006)

 Tokyo Financial Exchange (TFX)

[edit]Korea

 Korea Exchange (KRX), formed from merger of

 KSE: Korea Stock Exchange: Stock Market Division;

 KOFEX: Korea Options & Futures Exchange: Derivatives Division;

 KOSDAQ: Technology Stocks: Growth Stocks Market Division.

[edit]Malaysia

 Bursa Malaysia
[edit]Pakistan

 Karachi Stock Exchange (KSE)

 National Commodity Exchange Limited (NCEL)

[edit]Philippines

 Manila Commodity Exchange (MCX)

[edit]Singapore

 Singapore Commodity Exchange (SICOM)

 Singapore Exchange (SGX)

 Singapore Mercantile Exchange (SMX)

[edit]Taiwan

 Taiwan Futures Exchange (TAIFEX)

[edit]Thailand

 Thailand Futures Exchange (TFEX)

 Bond Electronic Exchange (BEX)

 Agricultural Futures Exchange of Thailand (AFET)

[edit]United Arab Emirates

 NASDAQ Dubai

 Dubai Gold & Commodities Exchange (DGCX)

 Dubai Mercantile Exchange (DME)

[edit]South America
[edit]Argentina

 MATba Mercado a Termino de Buenos Aires

 ROFEX (Rosario Futures Exchange)

[edit]Brazil

 Brazilian Mercantile and Futures Exchange (BM&F)

 Maringá Mercantile and Futures Exchange

[edit]Oceania

[edit]Australia

 Australian Securities Exchange

[edit]New Zealand

 New Zealand Exchange

 New Zealand Futures & Options Exchange

[edit]Africa

[edit]South Africa

 South African Futures Exchange (SAFEX)

[edit]Kenya

 Africa Mercantile Exchange (AfMX)

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Commodity trading:

Links under this Commodity trading in India is regulated by the Forward Markets Commission
site (FMC) headquartered at Mumbai, it is a regulatory authority which is overseen by the Mini
Cash Stocks of Consumer Affairs and Public Distribution, Govt. of India. It is a statutory body set up in
Future Stock under the Forward Contracts (Regulation) Act, 1952.
Gold  & Silver After equity trading, commodity trading is going to be the next big thing for investors. In In
charts
people have a love for Gold and Silver, trading is also going to pick up in Gold and Silver.
Commodity
Trading Globally, the commodity trade market is about three times the size of equities trade market.
Option Strategies India, presently, the commodities market is still in a nascent stage and is gradually picking u
taking a cue from global markets.
Topics Commodity:
Nasdaq and Dow  Any goods that are unbranded and are commonly traded in the market come under commod
Old Economy Commodity trading
Stocks Commodity markets are quite like equity markets. The commodity market also has two
Software stocks constituents i.e. spot market and derivative market. In case of a spot market, the commoditie
Pharma Stocks
bought and sold for immediate delivery. In case of a commodities derivative market, variou
PSU Stocks
Information financial instruments having commodities as underlying are traded on the exchanges. It has
seen that traditionally in India people have hedged their risks with Gold and Silver.
Commodities future
Commodity future is a derivative instrument for the future delivery of a commodity on a fix
date at a particular price. The underlying in this case is a particular commodity.
If an investor purchases an oil future, he is entering into a contract to buy a fixed quantity of
a future date. The future date is called the contract expiry date. The fixed quantity is called t
contract size. These futures can be bought and sold on the commodity exchanges.
The commodities include agricultural commodities like wheat, rice, tea, jute, spices soya,
groundnut, coffee, rubber, cotton, etc, precious metals - gold and silver, base metals - iron o
lead, aluminium, nickel, zinc etc, and energy commodities - crude oil and coal.
The number of retail investors participating in the market is increasing gradually after the
introduction of commodities futures. The expected growth rate of commodity market is 40 p
annually over the next five years.
Benefits of Commodities Futures:
To producer: A producer of a commodity can sell the futures of the commodity, thereby en
that he can sell a particular quantity of his commodity at a particular price at a particular dat

To investors: An investor has alternative investment instruments where he can take a positi
to future price and the spot price at a particular date in future and buys and sells options. He
interested in taking deliveries of the commodities.

To commodity trader: A commodity trader can use these to ensure that he is protected aga
any adverse changes in the prices. He can enter into a futures contract for purchase of a cert
quantity of the underlying at a particular price on a particular date, or he can enter into a fut
contract for sale of a particular quantity on a particular date at a particular price and be assu
the margins because both his purchase price as well as the sale price are fixed. Traders do a
arbitrage in Gold and Silver. Whenever they find Gold moving up, they short silver and sim
whenever they find silver moving up and gold likely to move down, they hedge.

To exporters: Future trading is very useful to the exporters as it provides an advance indica
the price likely to prevail and thereby help the exporter in quoting a realistic price and there
secure export contract in a competitive market. Having entered into an export contract, it en
him to hedge his risk by operating in futures market.
Option trading in commodity is, however presently prohibited.

 
List of exchanges and their respective traded commodities is given below:
1. Bhatinda Om & Oil Exchange Ltd., Gur
Batinda.
                                                         
2. The Bombay Commodity RBD Pamolein, Groundnut Oil, Sunflower Oil, CottonSeed,
Exchange Ltd.Mumbai Safflower, Groundnut, Castor oil-Int'l, Castorseed, Cottonse
Sesamum oil, Sesamum OilCake, Safflower, OilCake, Rice
Rice Bran Oil, Rice Bran OilCake, Safflower Oil, Crude Palm
3. The Rajkot Seeds oil & Bullion Groundnut Oil, Castorseed
Merchants` Association Ltd

4. The Meerut Agro Commodities Gur

Exchange Co. Ltd., Meerut

5. The Spices and Oilseeds Turmeric

Exchange Ltd.
 

6. Ahmedabad Commodity CottonSeed

Exchange Ltd. Castorseed

7. Vijay Beopar Chamber Gur

Ltd.,Muzaffarnagar Mustard Seed

8. India Pepper & Spice Trade Pepper Domestic-MG1

Association.Kochi Pepper Domestic-500g/l
Black Pepper Int'l-MLS ASTA
Black Pepper Int'l-VB ASTA
Black pepper Int'l FAQ
Pepper 550 G/L
Rubber RSS4
9. Rajdhani Oils and Oilseeds Gur
Exchange Ltd.  Delhi Rapeseed/Mustardseed

10.National Board of Trade. Indore. Rapeseed/Mustardseed

Rapeseed/Mustardseed Oil
Rapeseed/Mustardseed oil-Cake
 Soy bean
Soy Meal
Soy Oil
Crude Palm Oil
11.The Chamber Of Gur
Commerce.,Hapur Rapeseed/Mustardseed

12.The East India Cotton Association Indian Cotton

Mumbai.

13.The Central India Commercial Gur

Exchange Ltd, Gwaliar Rapeseed/Mustardseed
 

14.The East India Jute & Hessian Hessian

Exchange Ltd, Sacking

15.First Commodity Exchange of Copra

India Ltd, Kochi Coconut oil
Copra cake
16.Bikaner Commodity Exchange Rapeseed/Mustardseed
Ltd.,Bikaner Rapeseed/Mustardseed Oil
Rapeseed/Mustardseed oil-Cake
Guarseed
Gram
GuarGum
17.Esugarindia Limited. Sugar Grade - M
Sugar Grade - S
18.National Multi Commodity Gur
Exchange of India Limited. RBD Pamolein
Groundnut Oil
Sunflower Oil
Rapeseed/Mustardseed
Rapeseed/Mustardseed Oil
Rapeseed/Mustardseed oil-Cake
Soy bean
Soy Oil
Copra
CottonSeed
Safflower
Groundnut
Sugar
Sacking
Coffee-Robusta Cherry AB
Coconut oil
Castorseed
Castor-oil
Groundnut oilCack
Cottonseed oil
Sesamum (Til or Jiljili)
Sesamum oil
Sesamum OilCake
Safflower OilCake
Rice Bran Oil
 Safflower Oil
Sanflower OilCake
Sunflower Seed
Pepper
Crude Palm Oil
Guarseed
CastorOil Cake
Cottonseed - Oilcake
Aluminium Ingots
Nickel
Vanaspati
Soybean Oilcake
Rubber
Copper
Zinc
Lead
Tin
Linseed
Linseed Oil
Linseed Oilcake
Coconut Oilcake
Gram
Gold
Silver
Rice
Wheat
Cardamom
Kilo - Gold
Masoor
Urad
Tur / Arhar
Moong
Rapeseed - 42
Raw Jute
Coffee-Arabica Plantation A
19.Surendranagar Cotton oil & Kapas
Oilseeds Association Ltd, CottonSeed
Cottonbales
20.Multi Commodity Exchange of Gur
India Ltd. RBD Pamolein
Groundnut Oil
Rapeseed/Mustardseed Oil
Pepper Domestic-MG1
Soy bean
Kapas
Soy Meal
CottonSeed
Turmeric
Castorseed
Castor-oil
Crude Palm Oil
Guarseed
Cottonseed - Oilcake
Nickel
Rubber
 Copper
Tin
Gram
Sugar Grade - M
Sugar Grade - S
Gold
Silver
Gold-M
Rice
Wheat
Ref Soya oil - Indore
Urad
Tur / Arhar
GuarGum
Castorseed-5
Silver-M
Steel - Flat
Steel - Long
Yellow Peas
Long Staple Cotton
Medium Stapple Cotton
Castorseed - Disa
Mustard Seed
Guarseed Bandhani
Gold - HNI
Silver - HNI
Red Chilly
Maize
Guar Gum Bandhani
CASHEW KERNEL W320
Basmati Rice
Jeera
Mustard Seed Jaipur
Crude Oil
Sarbati Rice
Sesame Seed ( Natural 99.1)
Cotton Long Kadi
Cotton Med Abohar
Cotton Short Staple
Steel Long Bhavnagar
Mentha Oil
21.National Commodity & Derivatives S06 L S Cotton Ahmedabad
Exchange Ltd. J34 M S Cotton Bhatinda
Crude Palm oil - Kandla
RBD P'Olein - Kakinada
EXP R/M oil - Jaipur
Rape/Mustard seed - Jaipur
Ref Soya oil - Indore
Soy bean - Indore
Pure Gold - Mumbai
Pure Silver - New Delhi
Pure Gold - Mumbai - 1 Kg
Pure Silver - New Delhi - 30 Kg (Mega)
Rubber - Kottayam
Pepper - Kochi
 Gram(Chana) - New Delhi
Guarseed - Jodhpur
Jute (B twill-665 Gms) - Kollata
Turmeric - Nizamabad
Castorseed - Disa
Raw Jute - Kolkata
GuarGum - Jodhpur
Sugar M Grade - Muzaffarnagar
Urad - Mumbai
Sugar S Grade - Vashi
Yellow Peas - Mumbai
Wheat - New Delhi SMQ
Soy Meal - Indore
SONA995MUM
CHANDIDEL
CottonKadi
CottonAbohar
Gur-chaku - Muzaffarnagar
Yellow Red Maize - Nizamabad
Grade A Raw Rice Delhi
Grade A Parboiled Rice Delhi
Common Raw Rice Delhi
Common Parboiled Rice Delhi
Mulberry Raw Silk
Mulberry Green Cocoons
Jeera Unjha
Chilli (Paala) Guntur
Mild Steel Ingots - Ghaziabad
Cashews W-320-Kollam
Whitish Sesame Seed - Rajkot
Cotton Seed Oilcake - Akola
Lemon Tur - Mumbai
Maharashtra Lal Tur - Akola
Arabica Coffee - Hassan
Robusta Coffee - Kushalnagar
22.Haryana Commodities Ltd., Hissar Rapeseed/Mustardseed
Rapeseed/Mustardseed Oil
23.The Bullion Association Limited  
24.e-Commodities Ltd  

MCX-SX started live operations on October 7, 2008 by launching monthly contracts in the USDINR currency
pair under the regulatory framework of Securities and Exchange Board of India (SEBI), and Reserve Bank of
India (RBI). Consequently, the stock exchange expanded its currency derivatives offerings to Euro-Indian
Rupee (EURINR), Pound Sterling-Indian Rupee (GBPINR) and Japanese Yen-Indian Rupee (JPYINR).

Each of these currency contracts on MCX-SX has a life of 12 months from the month in which it is launched. 
 
USDINR
 
EURINR
 
 GBPINR
 
JPYINR
Contract Specifications for USD - INR
Symbol USDINR
Instrument Type FUTCUR
Unit of trading 1 (1 unit denotes 1000 USD)
Underlying USD
Quotation/Price
Rs. per USD
Quote
Tick size 0.25 paise or INR 0.0025
Monday to Friday
Trading hours
9:00 a.m. to 5:00 p.m.
Contract trading
12 month trading cycle.
cycle
Last trading day Two working days prior to the last business day of the expiry month at 12 noon.
Last working day (excluding Saturdays) of the expiry month.
Final settlement day
The last working day will be the same as that for Interbank Settlements in Mumbai.
Theoretical price on the 1st day of the contract. On all other days, DSP of the
Base price
contract.

Price operating Tenure upto 6 months Tenure greater than 6 months

range +/-3 % of base price +/- 5% of base price

Clients Trading Members Banks

Position limits Higher of 6% of total Higher of 15% of the total Higher of 15% of the total
open interest or USD 10 open interest or USD 50 open interest or USD 100
million million million
Minimum initial
1.75% on first day & 1% thereafter.
margin
Extreme loss margin 1% of MTM value of gross open position.
Rs. 400/- for a spread of 1 month, Rs. 500/- for a spread of 2 months, Rs. 800/- for a
Calendar spreads
spread of 3 months & Rs. 1000/- for a spread of 4 months or more
Daily settlement : T + 1 
Settlement
Final settlement : T + 2
Mode of settlement Cash settled in Indian Rupees
DSP shall be calculated on the basis of the last half an hour weighted average price of
Daily settlement
such contract or such other price as may be decided by the relevant authority from
price (DSP)
time to time.
Final settlement
RBI reference rate
price (FSP)
 
Hedging scenarios

Exchange-traded currency futures are used to hedge against the risk of rate volatilities in the foreign
exchange markets. Here, we give two examples to illustrate the concept and mechanism of hedging:
Example 1:
Suppose an edible oil importer wants to import edible oil worth USD 100,000 and places his import order on
July 15, 2008, with the delivery date being 4 months ahead. At the time when the contract is placed, in the
spot market, one USD was worth say INR 44.50. But, suppose the Indian Rupee depreciates to INR 44.75
per USD when the payment is due in October 2008, the value of the payment for the importer goes up to
INR 4,475,000 rather than INR 4,450,000. The hedging strategy for the importer, thus, would be:
Current Spot Rate (15th July '08)  : 44.5000
Buy 100 USD - INR Oct '08 Contracts on (1000 * 44.5500) * 100 (Assuming the Oct '08 contract
15thJuly ’08 is trading at 44.5500 on 15th July, '08)
Sell 100 USD - INR Oct '08 Contracts in Oct : 44.7500
'08 Profit/Loss (futures market) 1000 * (44.75 – 44.55) * 100 = 20,000
Purchases in spot market @ 44.75 Total cost : 44.75 * 100,000
of hedged transaction 100,000 * 44.75 – 20,000 = INR 4,455,000
 
Example 2:
A jeweller who is exporting gold jewellery worth USD 50,000, wants protection against possible Indian
Rupee appreciation in Dec ’08, i.e. when he receives his payment. He wants to lock-in the exchange rate for
the above transaction. His strategy would be:

One USD - INR contract size : USD 1,000

Sell 50 USD - INR Dec '08 Contracts  : 44.6500
(on 15th Jul '08)
Buy 50 USD - INR Dec '08 Contracts in Dec '08 : 44.3500
Sell USD 50,000 in spot market @ 44.35 in Dec '08 (Assume that initially Indian rupee depreciated , but
later appreciated to 44.35 per USD as foreseen by the exporter by end of Dec '08)
Profit/Loss from futures (Dec '08 contract) : 50 * 1000 *(44.65 – 44.35)
= 0.30 *50 * 1000 
= INR 15,000
 
The net receipt in INR for the hedged transaction would be: 50,000 *44.35 + 15,000 = 2,217,500 + 15,000
= 2,232,500. Had he not participated in futures market, he would have got only INR 2,217,500. Thus, he
kept his sales unexposed to foreign exchange rate risk.
 
 
How it works
 Presently, all futures contracts on MCX-SX are cash settled. There are no physical contracts.
 All trade on MCX-SX takes place on its nationwide electronic trading platform that can be accessed
from dedicated terminals at locations of the members of the exchange.
 All participants on the MCX-SX trading platform have to participate only through trading members
of the Exchange.
o Participants have to open a trading account and deposit stipulated cash/collaterals with the
trading member.
 MCX-SX stands in as the counterparty for each transaction; so participants need not worry about
default.
o In the event of a default, MCX-SX will step in and fulfil the obligations of the defaulting
party, and then proceed to recover dues and penalties from them.
 Those who entered either by buying (long) or selling (short) a futures contract can close their
contract obligations by squaring-off their positions at any time during the life of that contract by
taking opposite position in the same contract.
o A long (buy) position holder has to short (sell) the contract to square off his/her position or
vice versa.
o Participants will be relieved of their contract obligations to the extent they square off their
positions.
 All contracts that remain open at expiry are settled in Indian rupees in cash at the reference rate
specified by RBI.