It’s been almost 3 months since crude oil margins were increased to almost 150%. These days, volatility seems to be back to pre-covid levels but the margins are still sky high. Are they ever going to go back to the normal 10% levels or is this going to be the new normal? I don’t see how this is sustainable in the long term. Volumes have already gone down considerably.
I think Nithin sir can Answer it…
in fact, I think the question should be will mcx margins will ever go back to old levels? because even base metals have cooled now but margins are still at higher side @nithin
The SPAN margin requirement is calculated such a way that the margin collected can cover for maximum intraday move by looking at the past. The way Crude oil moved early this year, it will take a long time (atleast 1 year) before the margin can go back to Pre-Covid levels.
That’s really unfortunate. Since intraday leverages are also going to slowly go away, that’s going to mean a requirement of 4-5 lakhs just for one lot of crude oil. Retail traders can then just forget about crude oil until the margins come back down, if they ever will.