Trading commodity futures and options involves more moving parts than equity derivatives. In equities, most contracts follow a common rulebook. In commodities, the rules change depending on what you\u2019re trading, expiry dates, cut-off times, and even settlement methods can differ from one contract to another.<\/p>\n
Take Gold and Crude Oil as examples.<\/p>\n
Gold futures are physically settled. As a contract nears expiry, it enters a tender period, where any open position can lead to physical delivery. Since physical delivery isn\u2019t supported, trading in Gold futures stops before the tender period begins.<\/p>\n
Unlike equity options, which expire alongside futures, Gold options are monthly contracts. If the underlying futures contract expires in the following month, the options expire seven trading days before that futures expiry. Otherwise, they expire on the last trading day of the month.<\/p>\n
Crude Oil works very differently. Crude Oil futures are cash-settled, with no delivery or tender period. Positions can be held right up to expiry and are settled in cash. Crude Oil options follow their own timeline as well, expiring two trading days before the underlying futures contract.<\/p>\n
When every commodity comes with its own timelines and rules, keeping track of these details can quickly get overwhelming.<\/p>\n
To make this easier, we\u2019ve added the MCX Info Widget on the Kite web. It brings all key contract details into one place.<\/p>\n