what happens if i fail to exit a future contract in MCX?
Most MCX contracts are cash settled, so whatever is the due date rate (settlement price), the futures get expired at and you are either credited or debited with money.
If it is not cash settled, it depends on which broker you are trading with to determine what happens when you don’t exit futures. Online brokers like us don’t support delivery, so before the contract gets into delivery period we forcibly square off positions. There are brokers who support delivery, so if you don’t square off, you might get assigned to either take or give delivery of the underlying.
If you are a trader who doesn’t have the underlying commodity or intent to buy, best to square off before it hits compulsory delivery period.
Check the image below to see which are compulsory delivery and which not. Click here to download.
Hi @nithin, May I safely assume that I don’t have to worry about delivery of commodity, since, Zerodha squares off “all commodity” open positions at expiry, in case I forget to square off or roll over a position? or is there any exception?
Yes, we square it off, but the onus is still on you as a trader to square positions off. Hasn’t happened till now, but there could potentially be an issue in the future where we didn’t square off. So best, you do it yourself.