The Multi Commodity Exchange (MCX) has announced the launch of Natural Gas Mini Options Contracts with Natural Gas Mini (250 MMBtu) Futures as underlying with effect from Tuesday, April 23, 2024 onwards. You can check the announcement from the exchange here
Natural Gas Mini Options contracts will be available for trading as below:
| Contract Launch Date | Contract Expiry Date | Contract Expiry Month |
|---|---|---|
| 23rd April, 2024 | May 24, 2024 | May 2024 |
| 23rd April, 2024 | June 21, 2024 | June 2024 |
The contract specification and trading parameters of the above contracts
| Particulars | Dates |
|---|---|
| Contract | Natural Gas Mini Options 24 May 2024 |
| Underlying Futures Contract | Natural Gas Mini 28 May 2024 |
| Contract Start Date | April 23, 2024 |
| Option Contract Expiry Date | May 24, 2024 |
| Sensitivity Report shall be provided on | May 20, 21, 22 & 23, 2024 at End of Day |
| Option Devolvement Intimation can be provided from | May 22, 2024 to May 24, 2024 |
| Option Devolvement Margin First Day | May 23, 2024 (from Beginning of Day) |
| Option Devolvement Margin Second Day | May 24, 2024 (from Beginning of Day) |
| First day of Trading after Option Positions Devolving into Futures Positions | May 27, 2024 |
| Particulars | Dates |
|---|---|
| Contract | Natural Gas Mini Options 21 June 2024 |
| Underlying Futures Contract | Natural Gas Mini 25 June 2024 |
| Contract Start Date | April 23, 2024 |
| Option Contract Expiry Date | June 21, 2024 |
| Sensitivity Report shall be provided on | June 17, 18, 19 & 20, 2024 at End of Day |
| Option Devolvement Intimation can be provided from | June 19, 2024 to June 21, 2024 |
| Option Devolvement Margin First Day | June 20, 2024 (from Beginning of Day) |
| Option Devolvement Margin Second Day | June 21, 2024 (from Beginning of Day) |
| First day of Trading after Option Positions Devolving into Futures Positions | June 24, 2024 |
Contract Specifications
| Symbol | NATGASMINI |
|---|---|
| Underlying | Underlying shall be Natural Gas Mini Futures contract traded on MCX |
| Description | Options on Natural Gas 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 Natural Gas Mini Futures Contract (250 MMBtu) |
| Underlying Quotation/ Base Value | Rs. / MMBtu |
| Strikes | 15 In-the-money, 15 Out-of-the-money and 1 Near-the money (31 CE and 31 PE). The Exchange, at its discretion, may may introduce additional strikes, if required. |
| Strike Price Intervals | Rs. 5 |
| 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% | |
| Short Option Minimum Margin – 10% | |
| 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: 120,00,000 MMBtu or 5% of the market wide open position, whichever is higher for all Natural Gas Options Contracts combined together. |
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| For a member collectively for all clients: 12,00,00,000 MMBtu or 20% of the market wide open position, whichever is higher for all Natural Gas Options Contracts combined together. |
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Contract Launch Calendar (on a continuous basis)
| Contract Month | Contract Launch Date | Contract Expiry Date |
|---|---|---|
| May-24 | 23rd April 2024 | 24th May 2024 |
| Jun-24 | 23rd April 2024 | 21st June 2024 |
| July-24 | 26th April 2024 | 24th July 2024 |
| Aug-24 | 29th May 2024 | 23rd August 2024 |
| Sep-24 | 26th June 2024 | 23rd September 2024 |
| Oct-24 | 29th July 2024 | 24th October 2024 |
| Nov-24 | 28th August 2024 | 21st November 2024 |
| Dec-24 | 26th September 2024 | 24th December 2024 |