The Multi Commodity Exchange of India (MCX), recognized as the leading commodity exchange in the nation, is set to introduce a new trading opportunity with the launch of Gold Ten (10 gram) futures contracts. Starting on April 1, 2025, this innovative trading option is tailored to simplify investment strategies for both individuals and traders keen on navigating the dynamic bullion market. With gold prices soaring to unprecedented heights, this initiative comes at a pivotal moment for market participants.
What You Need to Know About Gold Ten Futures
The Gold Ten futures contracts will allow investors to trade in units of 10 grams. This trading initiative is designed to provide a cost-effective method for individuals to manage their investments in gold, particularly as prices approach the ₹90,000 per 10 grams mark. Recently, the MCX gold price peaked at ₹88,970, reflecting a robust demand driven by global market trends.
Key Features of Gold Ten Futures Contracts
- Symbol: GOLDTEN
- Trading Unit: 10 grams
- Maximum Order Size: 10 kg
- Tick Size: ₹1 per 10 grams
- Daily Price Limits: Starting at 3%, extendable to 6%, and potentially 9% during periods of high volatility
- Margin Requirements: Minimum initial margin of 6% (or as per SPAN), with an extreme loss margin of 1%
- Trading Hours: Monday to Friday, from 9:00 a.m. to 11:30/11:55 p.m. (adjusted for US daylight saving time)
Delivery Mechanism and Final Settlement
The contracts will operate under a compulsory delivery framework at the MCX’s designated clearinghouse in Ahmedabad, with additional facilities in New Delhi and Mumbai. Gold delivered must meet 999 purity standards, sourced strictly from LBMA-approved suppliers or MCX-registered domestic refiners.
Key delivery details include:
- Staggered Delivery Period: Begins five trading days before contract expiry, allowing buyers and sellers to specify delivery preferences.
- If no preferences are indicated, contracts will default to compulsory delivery upon expiry.
- Delivery margin will be set at either 3% + 5-day 99% VaR of spot price volatility or 25%, whichever is greater.
On the contract’s expiry date, the Due Date Rate (DDR) for final settlement will be determined based on the Ahmedabad spot price for gold (10 grams, 995 purity), adjusted to reflect 999 purity. In cases where the spot price is unavailable, the MCX Clearing Corporation will adhere to established guidelines for calculating the final settlement price.
Enhancing Market Liquidity and Investment Opportunities
The introduction of Gold Ten futures contracts is anticipated to significantly improve liquidity within the bullion market. This new trading option offers an efficient platform for both retail and institutional investors to engage with gold price fluctuations effectively. By leveraging these contracts, market participants can diversify their investment portfolios while mitigating risks associated with price volatility.
As the demand for gold continues to rise, the MCX’s strategic move to launch these futures contracts positions it as a key player in the evolving commodity market landscape. Don’t miss out on this chance to explore new investment avenues!
