Back in December 2019, MCX launched 3 commodity indices- iCOMDEX Composite, iCOMDEX Bullion, and iCOMDEX Base Metals that cover almost all popular commodities traded on the exchange.
Here are some details of the indices.
iCOMDEX Composite- As the name suggests, this is the composite index that tracks all commodities traded on MCX. The weights for each commodity are given based on the Production and Liquidity value of the individual commodities. Crude Oil has the highest weightage capped at 30%, followed by Gold and Silver.
iCOMDEX Bullion- This index tracks Gold and Silver,
iCOMDEX Base Metals- This index tracks the 5 popular base metals i.e., Aluminium, Copper, Lead, Nickel and Zinc.
All these indices have a starting value of 10000(as on Dec 2015) and track the current month futures contract of the underlying commodity contracts. The index will start tracking the next month futures contracts before the current month contract hits tender period(if the contract is physically settled)
MCXBULLDEX Futures
To start with MCX today launched futures trading in the iCOMDEX Bullion Index.
Highlights:
- The contract will be a monthly contract expiring on the 25th of every month.
- The lot size of the contract is 50 units of the index. Everyone Rs 1 rupee movement in the contract will result in a Rs 50 Profit or loss
- The index is trading around 16165(as of 24 Aug '20), which makes the contract value of about 8L.
- Margin required to trade will be 14%(SPAN +Exposure) of the contract value.
MCX will soon be launching futures contracts for the composite and the base metal indices in the coming month.
The futures contract for the Bullion index is available to trade on Kite under the trading symbol- MCXBULLDEX.
Only the current month contract is allowed to trade under the NRML product type. We will soon be opening MIS/CO and other month contracts based on the liquidity situation of the contracts.
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Can you kindly ensure - BrokerageCalculator is updated to contain MCXBULLDEX, so we know the Break Even Point for trading in this instrument ?
Thanks
Brokerage calculator and Margin calculator will be updated with MCXBULLDEX soon…
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Mcx would still keep the margins freaking high and help evaporate the regular volumes.
It is because of rule by SEBI. For every contract in MCX commodity there should be physical settlement but for Mini contracts there will be no Physical settlements that is the reason they removed the Mini contracts.
SEBI formulates the margin requirements that the exchange and the broker have to abide by.
There are 2 components here:
SPAN- This is calculated to cover the max loss that a contract can have on a single day. Price Scan Range(PSR) covers for this based on the volatility and the weightages of the underlying contracts. SEBI mandates 3 day margin period of risk(MPOR) for all commodity contracts(This is 2 days for Equity derivatives).
Example-
Volatility =2.5%
PSR %= 3 standard of Volatility = 3* 2.5% ≈7.5%
3 day MPOR of PSR Range=SQRT(3)* 7.5% ≈13%
Exposure or ELM- This is the margin over and above the SPAN to cover for black swan events and is charged at 1% currently for the index future contracts.
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The above information provided by @MohammedFaisal is wrong. The quantity is 80. I placed 2 trades yesterday just to check & the screenshot from the Contract Note is attached.
The lot size is 50, looks like the lot size was captured incorrectly on the contract note. We are getting it fixed.
If you see the net obligation, that is correct(as per 50 lot size)
@MohammedFaisal how can the net obligation be correct ? Maybe you can refer to the attached screenshot which shows the Net Total is Rate * Quantity. In this case the quantity is 80.
Very unprofessional of Zerodha to send out a Legal Document (Contract Note) containing false information. This is a fit case to be reported to SEBI.
Do check the net obligation, it will be calculated as per 50 as lot size(The screenshot you shared doesn’t include the net obligation).
I understand that the quantity is displayed as 80 which will be corrected and you’ll be able to access the corrected contract note on Console soon.
@MohammedFaisal
Amazed that you still insist that the Net Obligation is computed by taking the lot size as 50, despite me sharing the screenshot.
Maybe you can check with your colleagues in Zerodha & see that the Net Obligation is computed by taking the quantity as 80. You can ask your colleagues to show you this specific Contract Note, then add up all the values to arrive at the Pay-in/ Pay-out obligation & it will become clear to you that the quantity is 80 not 50.
Maybe you’re used to seeing people posting w/o checking, but in this case I double checked before posting my initial post. If you’re still not convinced as said above check with your colleagues in Zerodha & the blunder from Zerodha will become clear.
What do you mean be ‘we’ ? Whom do you represent ?
@iTrader,
I took a trade in MCXBULLDEX too, here is a screenshot of the contract note containing the Net Payin- Payout obligation.
If you see I took the position at 16235 and carried it forward to today. The closing price was 16067, hence, a 168 point MTM loss.
If you see the obligation charged on the ledger it is
-8400( 168*50) and not
-13440(168*80).
I work at Zerodha. Wasn’t that obvious? 
No it wasn’t, as there are already siva, shubh who we assume work with zerodha.
Bro Chill
By this he says that it’s just a mistake in lot quantity.
But actual loss or profit is calculated based on 50 only.
Check your funds statement/ contract note. if it is same, There is no intention to cheat.
Mistakes happen!! Be cool.
Focus on trading. Happy Trading!!
@MohammedFaisal
Since you insist on embarrassing Zerodha completely on this forum, here is the screenshot from the Contract Note. Get hold of a calculator, work out the numbers & you will know for yourself that indeed Zerodha has stated false information on a legal / official document (Contract Note)
@venugopal maybe you can see the screenshots & it will become clear that Zerodha indeed has made a big blunder. I am not privy to what their intention is / was in providing false information in the official document.
I go by what I see & despite clearly stating that they have made a mistake, this person from Zerodha continues to insist that Net Value is right. I may not be as smart & intelligent as Zerodha, but do have elementary maths skill (Multiplication & Addition).
When a specific issue is highlighted, it is prudent to accept the fault & make mends not continue with the same argument despite facts clearly showing where the blunder lies.
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Sir, As per the screenhot which you shared the obligation for the MCXBULLDEX trades is zero, and rest of the obligation posted for SILVER trades.
As Mr. Faisal agreed the Lot size is incorrect and computed the wrong value (Net value) , as far as Net /Final obligation is concerened is correct i believe, No discrepency in it.
