In some not so good news for commodity traders, the margins required to trade commodity derivatives are set to go up soon (implementation date yet to be announced). Check this circular from MCX.
Margins will increase by up to a whopping 80%. See below, an estimate on how much margins will go up by.
|Margin required - currently||Margins post circular||Margin required (CME, Nymex, etc)|
The margin required for the same contract on international exchanges (CME, Nymex, etc) is significantly lesser. Even if we had to factor in the currency (rupee) risk, this new margin requirement seems like overkill. We are taking this up with the exchanges.
If you are trading commodities, you’d have to be prepared for the margin going up, it can happen anytime.