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23 Apr 2024, 10:30 AM
MCX launches crude oil mini options contracts
Multi Commodity Exchange (MCX) announced the launch of crude oil mini options contracts with crude oil (10 barrels) futures as underlying with effect from Tuesday, April 23, 2024. The contracts will be available for trading as mentioned below.
| Commodity | Contract Launch Date | Contract Expiry Date | Contract Expiry Month |
Crude Oil Mini Options |
23rd April, 2024 | 14th June, 2024 | June, 2024 |
| 23rd April, 2024 | 17th July, 2024 | July 2024 | |
You can check the circular here.
Contract specifications
| Symbol | CRUDEOILM |
|---|---|
| Underlying | Underlying shall be Crude Oil Mini Futures contract traded on MCX |
| Description | Options on Crude Oil Mini Futures |
| Option Type | European Call & Put Options |
| Contract Listing | Contracts will be available as per the Contract Launch Calendar |
| Contract Start Day | The next business day immediately after the expiry of the near month futures contracts |
| Expiry Day (Last Trading Day) | Two business days prior to the Expiry Day of the underlying futures contract |
| Trading Period | Mondays through Fridays |
| Trading Session | Monday to Friday: 9.00 a.m. to 11.30 / 11.55 p.m.* (* Based on US daylight saving time) |
| Trading Unit | One MCX Crude Oil Mini futures contract (10 bbl) |
| Underlying Quotation/ Base Value | Rs. Per barrel |
| Underlying Price Quote | Ex – Mumbai (excluding all taxes, levies, and other expenses) |
| Strikes | 25 In-the-money, 25 Out-of-the-money and 1 Near-the money (51 CE and 51 PE). The Exchange, at its discretion, may may introduce additional strikes, if required. |
| Strike Price Intervals | Rs. 50 |
| Tick Size (Minimum Price Movement) | Rs. 0.05 |
| Settlement of premium/ Final Settlement | T+1 day |
| Mode of settlement | On expiry of options contract, the open position shall devolve into underlying futures position as follows: |
| – long call position shall devolve into long position in the underlying futures contract. | |
| – long put position shall devolve into short position in the underlying futures contract. | |
| – short call position shall devolve into short position in the underlying futures contract. | |
| – short put position shall devolve into long position in the underlying futures contract. | |
| All such devolved futures positions shall be opened at the strike price of the exercised options | |
| Exercise Mechanism at expiry | – All In the money (ITM)# option contracts shall be exercised automatically, unless ‘contrary instruction’ has been given by long position holders of such contracts for not doing so. |
| – The ITM option contract holders, who have not submitted contrary instructions, shall receive the difference between the Settlement Price and Strike schedule.Price in Cash as per the settlement schedule. | |
| – In the event contrary instruction are given by ITM option position holders, the positions shall expire worthless. | |
| – All Out of the money (OTM) option contracts shall expire worthless. | |
| – All devolved futures positions shall be considered to be opened at the strike price of the exercised options. | |
| – All exercised contracts within an option series shall be assigned to short positions in that series in a fair and non-preferential manner. | |
| Margins | The Initial Margin shall be computed using SPAN (Standard Portfolio Analysis of Risk) software, which is a portfolio based margining system |
| Extreme Loss Margin – Minimum 1% (to be levied only on short option positions) | |
| Margining at client Level | Initial Margins shall be computed at the level of portfolio of individual clients comprising of the positions in futures and options contracts on each commodity |
| Additional and/ or Special Margin | At the discretion of the Exchange when deemed necessary |
| Due Date Rate (Final Settlement Price) | Daily settlement price of underlying futures contract on the expiry day of options contract. |
| Maximum Allowable Open Position | Position limits for options would be separate from the position limits applicable on futures contracts. |
| For individual clients: 9,60,000 barrels or 5% of the market wide open position, whichever is higher for all Crude Oil Options contracts combined together. | |
| For a member collectively for all clients: 96,00,000 barrels or 20% of the market wide open position, whichever is higher for all Crude Oil Options contracts combined together. | |
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