Mcx new circuit limits is killing option buyers

General
1

I think mcx has introduced new circuit rules which doesnt make any sense at all. For example, on 2nd feb, copper 1000PE closed at 14 levels with decent volumes. But yesterday on 3rd, the upper circuit was set at 6.63. Straight 50% cut. How can uc be set less than 50% of closing price

The story not ends here. Yesterday 1000pe closed at 4.46 but today morning uc was at 2.65. So in 2 days 14 rs option reduced to 2.65.

1 Like
2

Think of the Regulator , its SEBI

3

I found this in an old MCX circular: “The upper and lower price band shall be determined based on statistical method using Black76 option pricing model and relaxed considering the movement in the underlying futures contract.”

Maybe to save option buyers from buying OTM contracts at unusual higher prices.

1 Like
4

But how you can change the circuit and that too upper circuit and limit it half of the closing value

2 Likes
5

And these idiots are not increasing circuit limit either. Copper moved from 1292 to 1272 but still 1000 PE in UC. If no UC then it will have definitely increased

2 Likes
6

Well, probably to discourage speculation.

2 Likes