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Informist, Wednesday, May 14, 2025

MUMBAI – The Multi Commodity Exchange Clearing Corp. of India, a wholly owned subsidiary of MCX, has decided to withdraw the additional margin of 1% levied on all variants of gold contracts on its trading platform, effective Wednesday.

With this, the margins applicable now in gold futures contracts will be:

--Applicable minimum initial margin or margin calculated as per SPAN (Standard Portfolio Analysis of Risk) , whichever is higher; and

--Extreme loss margin of 1.25%.

"MCXCCL follows a comprehensive and stringent margining system for all commodity derivatives contracts traded on MCX," it explained separately. "Actual margining is done on an on-line basis. For the purpose of computing and levying the margins, MCXCCL uses SPAN system which follows a risk-based and portfolio-based approach. The SPAN Risk Parameter File (RPF) is generated by MCXCCL daily at pre-defined timings and RPF files so generated are provided to the members and made available on the MCXCCL website."

It also clarified that extreme loss margin is levied to cover the tail end risk not covered by initial margins. Additional margin and/or special margin shall also be levied, whenever deemed necessary, considering the volatility and price movement in the commodities, it added.  End

Reported by Abhijit Doshi

Edited by Tanima Banerjee

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