(Trading Related Questions)

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Trading ........................................................................................................................ 3
1. What are the trading sessions and trading period of MCX? .................................... 3
2. What are the different terms in contract specifications?.......................................... 3
3. What is base price? ................................................................................................... 4
4. What is circuit filter? ................................................................................................ 4
5. Why the user ID gets locked (account locked) and how to unlock it? (What to do
if I lose my MCX password?)................................................................................. 4
6. Till what period I can keep the contract open? (Last day to square off the
position) .................................................................................................................. 4
7. What are the different kinds of orders I can place in the trading system?.............. 5
8. What is a long and short position?........................................................................... 6
9. What does open Interest in the market mean? ........................................................ 6
10. What is a Member-Administrator terminal? ......................................................... 6
11. How can I set turnover limits for my users? .......................................................... 6
12. How can I view the total margins utilized at Member level? ................................ 7
13. How do I come to know that my margin is getting utilized................................... 7
14. When does a member get suspended for trading? What are remedial measures? 7
15. How can I modify my order? .................................................................................. 8
Modification or cancellation of orders.................................................................... 8
16. How to modify the client code of an executed trade?............................................ 8
17. What are the order matching rules? ........................................................................ 8
18. What is the maximum allowable open position? ................................................... 9
19. How can a member restrict a user from trading in a specific commodity / ........... 9
contract?.................................................................................................................. 9
20. What is snapshot and where can I get it?............................................................... 9
21. What is the turn over limit for a member?.............................................................. 9
22. What is surveillance watch?.................................................................................... 9
23. How can I set limits for my sub-brokers and clients?......................................... 10
24. How do I get circulars of MCX?.......................................................................... 10
25. How do I access daily reports? ............................................................................ 10
26. Where can I get product specifications (feasibility study report)? ............ 10

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 Trading

1. What are the trading sessions and trading period of MCX?

The Exchange operates on all days except, Sundays and Exchange specified
holidays. The Exchange notifies a list of holidays for each calendar year in
advance.
Days Time Commodities Traded
---------- ------------- -----------------------------------------

Monday to Friday 10.00am to 5.00pm All commodities launched by MCX

Monday to Friday 5.00pm to 11. 55pm (Winter) All commodities except agri
5.00pm to 11.30pm (Summer) commodities and Sponge Iron.

Saturday 10.00am to 2.00pm All commodities launched by MCX

2. What are the different terms in contract specifications?

• Trading unit - The Trading unit is the minimum quantity for a contract
that can be bought or sold. e.g. If a member is buying 1 lot of cardamom,
he has to buy minimum 100kg of cardamom given trading unit of 100kg.

• Quotation / Base value – It is the Quantity in Lot or Weights for which

the prices are quoted for online trading on TWS.
e. g. If the quotation or base value for Gold contract is given as 10 grams
and the price available for trading on TWS is 8000, that price is for 10
grams of the Gold.

• Maximum order size – Maximum order size is the maximum no. of lots
that can be bought or sold in one Single order. The maximum order size of
each commodity is given in its contract specifications.

• Tick Size – Tick size is the minimum price difference between the bids and
asks for a particular contract. The tick size is given in the contract
specifications.

• DPR – Daily Price Limit i.e. circuit filter limit is the percentage of variation
allowed in the price of a commodity in a day with respect to the previous
day’s close price for the day

• DDR - Due date rate is final settlement price for particular future contract
and calculation process called computation of DDR.

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3. What is base price?

Base price is a reference price used for launching / commencing new futures
Commodity/Contract. On the basis of that daily price range gets adjusted.

4. What is circuit filter?

Circuit Filter: The Exchange notifies a daily circuit filter limit for futures
Contract in terms of percentage of intra day variation allowed in a day with
respect to the close price of previous day. Circuit filter provides the
maximum range within which a contract can be traded during day. Such
circuit filter is different for different commodities. The orders, which are in
violation of such circuit filter, are rejected by the system.

5. Why the user ID gets locked (account locked) and how to unlock it? (What to do
if I lose my MCX password?)

A Member ID/User ID get locked, if the Member /user enters wrong

password for more than 5 times. Incase a user ID gets locked or the user has
forgotten his password, the password is reset by the Exchange on receipt of
request on letter head signed only by authorized signatory of the member. A
facility is provided in Member Admin Terminal for setting the password his
user id in case user has forgotten his password and user id is not locked.

A default password for logging member admin / user id after resetting

password from Exchange is oms.123 (for password policy refer circular no.
MCX/566/2006 dated. December 19, 2006).

The letter can be sent at Fax No. – 66494152.

6. Till what period I can keep the contract open? (Last day to square off the
position)

Members should refer to the circular issued by the Exchange for different
commodities to know the last day to square off the position in respective
commodities. Further no member / client can take fresh /increase
positions in last five days of contract expiry in case of Both and Seller ‘s
option delivery logic with an exception to International refrenceable
commodities ( refer circular no. MCX/517/2006 dated. November 29,
2006).

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7. What are the different kinds of orders I can place in the trading system?

Order Types: There are two types of Orders.

1. Regular Order.
2. Stop Loss Order.

• Regular Order: Regular orders can be placed in the system with market price
or limit price.

Conditions: As per the conditions they are of following types.

ƒ Limit order: specifying the price at (or better than) which the trade
should be executed.
ƒ Market order: Market order should be executed at whatever is the
prevailing Market price at touchline on or after submission of such
order. If there is no market price at that point of time, it takes the
last traded price and remains in the system. If there is no LTP (Last
Traded Price) then system confirms the order with the same side or
the counter side touchline and if there are no orders at the touchline
and no LTP, then system confirms the price as previous day’s close
price.

• Stop loss Order: which are kept by the system in suspended or

abeyance mode and is activated only on trigger of a price, as defined
by the member.

Orders can be classified based on the period as:

• End of the session (EOS): are available for execution during the
current trading session until executed or cancelled. All EOS orders will
get cancelled at the end of the day during which such orders were
submitted.

• Good till date: which are available for execution till end of the date
indicated in the order or till the last trading day of that contract month,
whichever is earlier?

• Good till cancel: which is available for execution till maturity of the
contract, or till it is cancelled by the Member /user, whichever is
earlier.

• Immediate or Cancel (IOC): orders will get cancelled if not executed

on submission of such an order. Such orders will not remain in the
order book.

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 • Day Order: are available for execution during the current trading until
executed or cancelled. All DAY orders will get cancelled at the end of
the day during which such orders were submitted

8. What is a long and short position?

Long Position: Taking a long position is buying a contract

Short Position: Taking a short position is selling a contract.

9. What does open Interest in the market mean?

The open interest is the number of contracts outstanding in the market (It can
be called as outstanding position at any point of time.)

10. What is a Member-Administrator terminal?

A Member Administrator terminal provides facility for:

• Providing/Setting Turnover limits for different terminals
• Allowing or disallowing different contracts/commodities to each
terminal.
• Viewing all orders and trades, Net Positions for all terminals.
• Can modify trades on behalf of users.
• Can square off outstanding open positions o behalf of terminals.
• Can take Online Back Up of orders and trades for all terminals.
• Facility to view User List.
• Facility to set the password for his users.

11. How can I set turnover limits for my users?

A member can set turnover limits for its user through the Member-
Administrator in the following way:

Steps to be followed for setting turnover limits: -

• Go to “Control” Menu
• Click on of surveillance maintenance
• Select user id for which limit is to be set.
• Write buy limit as well as sale limit.
• Fill up remarks column.
• Apply

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12. How can I view the total margins utilized at Member level?

A Member can view the details of his margin limit and margin utilized, mark
to market loss through the Member Administrator using the following path:
• Go to “Control” Menu
• Click on Surveillance Watch
• View the Margin Utilized
• View MTM Loss.

13. How do I come to know that my margin is getting utilized

Members receive alerts on utilizing margin of 60%, 75% and 90% against
their margin deposited with the Exchange. Member can also check
Member can also check the alert message through screen messages
transmitted in Alert window.

14. When does a member get suspended for trading? What are remedial measures?

A member is suspended from trading,

a. In case a Member is not maintaining Base minimum deposit with the
Exchange.
b. Any other reason as per Byelaws, Rules and Business Rules of the
Exchange / FMC directives.

Under these circumstances, the member may take following remedial

measures:
i. Member may fulfill the pay-in shortages / margin deficits.

Further with reference to Circular no. MCX/234/2006 dated June 7, 2006,

If the trading terminal (s) is suspended for 3 or more times during the
preceding 30 days, such member will be required to increase the
Minimum Security Deposit / Initial Margin to the next level of security
deposit.

In addition to breach of Minimum Security Deposit, if a suspended

member has an outstanding position in the market, the outstanding
position of the member may be squared off in either of the following
circumstances:

1. If Online Marked-to-Market loss is more than 60% during the period of

suspension.
2. The member remains in suspended mode at the commencement of the
market on two consecutive days, the outstanding position will be squared
off after 11:00 am at market price on the 3rd day.

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15. How can I modify my order?

Modification or cancellation of orders

The order can be modified by effecting changes in the order input parameters.
The order can be modified using following path:
• Go to “Orders” Menu.
• Click on Order Book and select view status as pending.
• Select the pending order to be modified.
• Select the option ‘Modify’ or ‘Cancel’.

16. How to modify the client code of an executed trade?

Client code can be modified using following path:

• Go to “Trades” Menu.
• Select the trade of which client code is to be modified.
• Select the option ‘Modify Client Code’.
• Client code modification from OWN to Client and from Client to OWN
is discontinued w.e.f 23.06.2006 and only from Client to Client
modification is permitted (refer circular no. MCX/566/2006 dated.
December 19, 2006).
• In case of agri commodities, trade modification is allowed only upto
05:15 pm on Monday to Friday and upto 02:15 pm on Saturday. In case
of other commodities i.e. other than agri commodities, traded
modification is allowed upto 11:55 pm on Monday to Friday and upto
02:15 pm on Saturday.

In order to ensure that client codes are entered with alertness and care, a penalty
on the client code changes made on a daily basis shall be imposed as per circular
no. MCX/T&S/032/2007 dated. January 22, 2007.

17. What are the order matching rules?

Orders in the normal market are matched on price -time priority basis. Best
buy order matches with the best sell order. The best buy order is the one with
the highest price and the best sell order is the one with the lowest price.

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18. What is the maximum allowable open position?

• Maximum Allowable Open Position: In order to avoid building of huge

open position in any commodity, the Exchange specifies the maximum
open position limit. With reference to Circular no. MCX/340/2006 dated
August 23, 2006, Exchange has revised Maximum Allowable Position
Limit at near month and Commodity level for all commodities.
Penalty provisions have been incorporated for breach of open position limits. (refer
circular no. MCX/300/2006 dated August 1, 2006.)

19. How can a member restrict a user from trading in a specific commodity /
contract?

A member can restrict his user from trading in specific commodity /contract
by disallowing the commodity /contract in Contract Basket.

20. What is snapshot and where can I get it?

A snapshot by the Exchange contains contract specifications, trading

parameters, delivery and settlement of all the commodities permitted for
trading. The Exchange provides this document as ready reference for
members.

21. What is the turn over limit for a member?

Turnover limit is at user level and not at member level. A member can have
‘n’ value of turnover limit subject to availability of unutilized margin for
executing the orders.

Computation of turnover limit at user level is as follows:

Utilized Buy and sell turnover limit comprises of : Traded Value + pending
orders.

22. What is surveillance watch?

The surveillance watch window is used to view the information regarding the
exposure taken by a member vis-à-vis his deposits and Mark to Market loss
limits permitted by exchange, for all the contracts.

The surveillance watches window displays following

a. TM – Member ID
b. User – User ID
c. Margin

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 d. Margin v/s Limit %
e. MTM limit
f. MTM profit / loss
g. MTM v/s Limit %

23. How can I set limits for my sub-brokers and clients?

In case the member is having VSAT/LL connection, he can set the Turnover
limits of his user ids through his administrative terminal provided by the
Exchange. Members who are trading though internet or any other mode of
communication can request the exchange in writing to set the limits at user
id level.

24. How do I get circulars of MCX?

Members can download circulars issued by the Exchange from Extranet (FTP)
server as well as MCX website i.e. www.mcxindia.com.

25. How do I access daily reports?

Members can download daily reports from Extranet (FTP) server. Members
who have VSAT or Leased Line connectivity media for trading cannot access
their folders during market hours
Over Internet by entering their Member ID and FTP Password, Member can
access their folders, any time.

26. Where can I get product specifications (feasibility study report)?

Feasibility study reports for commodities are available on website of the

Exchange i.e. www.mcxindia.com. It contains information like production,
usage, demand, supply etc.

It is always advisable for a trader to read feasibility study report before

trading.

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