Commodity Derivatives on WebNotes

Agri position limits on Zerodha

Sun, 21 Jun 2026 00:00:00 +0000

Agri position limits are the regulatory caps, set by the Securities and Exchange Board of India , on how large a position any single trader or broker may hold in an agri commodity’s derivatives, and they run on a two-tier structure of member-level and client-level limits with a tighter near-month sub-limit. For a Zerodha trader the limits matter mostly as background, because Zerodha offers commodity F&O on the Multi Commodity Exchange and the National Stock Exchange commodity segment but not the National Commodity & Derivatives Exchange , where most agri derivatives trade.

Bullion mini contracts on Zerodha

Sun, 21 Jun 2026 00:00:00 +0000

Bullion mini contracts are the smaller-lot gold and silver futures listed on the Multi Commodity Exchange of India, a SEBI-regulated commodity exchange, that give retail traders the same per-gram price exposure as the standard contracts at a fraction of the lot value and margin. On Zerodha Kite , once the commodity segment is active, a trader can access gold mini, gold guinea, and gold petal on the gold side, and silver mini and silver micro on the silver side, alongside the full-size 1 kg gold and 30 kg silver contracts.

Commodity options on Zerodha

Sun, 21 Jun 2026 00:00:00 +0000

Commodity options on Zerodha are MCX options on commodity futures, listed on the Multi Commodity Exchange of India, a SEBI-regulated commodity exchange, covering gold, gold mini, silver, silver mini, crude oil, and natural gas, and they differ from equity index options in one mechanic that surprises traders: an in-the-money option does not cash-settle at expiry but devolves into a position in the underlying futures contract at the strike price. Once the commodity segment is active on Zerodha Kite , these options trade alongside the corresponding MCX futures.

Electricity futures on MCX

Sun, 21 Jun 2026 00:00:00 +0000

Electricity futures on MCX are cash-settled financial derivatives on the price of power, launched on the Multi Commodity Exchange on 10 July 2025 as India’s first exchange-traded electricity contract and regulated by SEBI as the financial-derivatives regulator. The contract is the Electricity Futures (Monthly Base Load), which lets a participant lock in the price of a constant block of power for a future delivery month, settling entirely in cash with no physical power changing hands. Its launch followed a Supreme Court order of 6 October 2021 that ended a decade-long dispute between SEBI and the Central Electricity Regulatory Commission over who regulates power derivatives.

Energy futures margins on Zerodha

Sun, 21 Jun 2026 00:00:00 +0000

Energy futures margins on Zerodha are the upfront capital the Multi Commodity Exchange of India, a SEBI-regulated commodity exchange, requires to hold a crude oil or natural gas futures position, and they run higher than most other commodities because crude and gas are among the most volatile contracts traded. The total margin is the sum of three layers, the SPAN initial margin, the exposure margin, and the extreme loss margin, all computed by the exchange and shown in the Zerodha margin calculator once the commodity segment is active on Kite .

How long MCX contracts can be held

Sun, 21 Jun 2026 00:00:00 +0000

MCX commodity contracts are dated monthly series listed on the Multi Commodity Exchange of India, a SEBI-regulated commodity exchange, and each one can be held only until its own last trading day, not indefinitely. A trader who wants exposure beyond a single contract’s life does not hold one contract longer; they roll, squaring off the expiring near-month contract and opening a far-month one. On Zerodha Kite , once the commodity segment is active, every MCX contract a trader can buy carries an expiry date built into its symbol.

MCX agri and pepper trading restrictions

Sun, 21 Jun 2026 00:00:00 +0000

Agri and pepper trading restrictions in Indian commodity derivatives are set by the Securities and Exchange Board of India , and the headline restriction is the suspension of derivatives trading in seven agri commodities ordered on 19 December 2021. The restrictions sit mainly on the agri complex that trades through the National Commodity & Derivatives Exchange , not on the bullion, energy and base-metals contracts that dominate the Multi Commodity Exchange .

This distinction is the first thing to get right. MCX is overwhelmingly a non-agri exchange. Its volume sits in gold, silver, crude oil, natural gas and base metals. The agri derivatives that SEBI restricts, and the pepper contract that was withdrawn earlier, are concentrated on NCDEX. So when commentary refers to “MCX agri restrictions,” the substance is really the SEBI suspension that hit the agri complex across exchanges, with NCDEX as the most affected venue.

MCX vs international price disparity

Sun, 21 Jun 2026 00:00:00 +0000

MCX-to-international price disparity is the gap between a commodity’s price on the Multi Commodity Exchange , India’s largest commodity-derivatives exchange and a SEBI-regulated entity, and the price of the same commodity on its international benchmark, such as WTI crude on NYMEX, gold on COMEX, or natural gas at the Henry Hub on NYMEX. The gap is not a pricing error. It is the predictable result of currency conversion, India’s import-duty regime, freight and premium, differences in contract design, and the hours when each market is open and closed.

Natural gas futures on MCX via Zerodha

Sun, 21 Jun 2026 00:00:00 +0000

Natural gas futures on MCX are cash-settled energy derivatives listed on the Multi Commodity Exchange of India, a SEBI-regulated commodity exchange, that track the NYMEX Henry Hub benchmark in Indian rupees and rank among the most volatile contracts an Indian retail trader can access. MCX lists a standard contract of 1,250 mmBtu (symbol NATURALGAS) and a mini contract of 250 mmBtu (symbol NATGASMINI), both tradeable on Zerodha Kite once the commodity segment is active.

NCDEX agri contracts and Zerodha

Sun, 21 Jun 2026 00:00:00 +0000

The National Commodity & Derivatives Exchange (NCDEX) is India’s principal agri-commodity derivatives exchange, regulated by the Securities and Exchange Board of India after the September 2015 merger of the Forward Markets Commission into SEBI, and Zerodha does not offer access to it. Zerodha routes commodity futures and options only to the Multi Commodity Exchange and the National Stock Exchange commodity segment, so the NCDEX agri contracts, from guar seed to castor seed, sit entirely outside a Zerodha account.

Why far-month MCX commodity option orders are rejected on Kite

Sun, 21 Jun 2026 00:00:00 +0000

A far-month MCX commodity option rejection on Kite is a Zerodha risk-management block: orders in commodity option contracts beyond the permitted near-month window are rejected before they reach the Multi Commodity Exchange , because those contracts carry near-zero liquidity and would expose the trader to a fill at a price far from fair value. For most commodity options on Kite you can trade only the current (near) month; the next month opens one day before the current contract expires, and energy options carry a wider two-month window.

MCX transaction charges and how they compare across brokers

Fri, 19 Jun 2026 00:00:00 +0000

What this is about

Anyone comparing commodity-trading costs across brokers needs one distinction first: the Multi Commodity Exchange (MCX) sets the transaction charge, and every broker passes it through identically. The transaction charge is not a place where brokers compete. Brokerage is. A client weighing Zerodha against a percentage-brokerage broker should compare the brokerage and the all-in cost, because the MCX transaction charge, the CTT , the SEBI turnover fee , and stamp duty are the same regardless of which member they route through.

Commodity Transaction Tax (CTT)

Sat, 16 May 2026 00:00:00 +0000

The Commodity Transaction Tax (CTT) is a transaction-level tax levied on the sale or purchase of certain non-agricultural commodity derivatives on recognised commodity derivative exchanges in India. CTT was introduced by Chapter VII of the Finance Act, 2013 with effect from 1 July 2013 and is structurally analogous to the Securities Transaction Tax (STT) that applies to equity and equity-derivative transactions. CTT is collected by the stock broker or the commodity derivative exchange at the time of the transaction and remitted to the Central Government on behalf of the parties.

Multi Commodity Exchange (MCX)

Sat, 16 May 2026 00:00:00 +0000

The Multi Commodity Exchange of India Limited (MCX) is India’s largest commodity derivatives exchange by trading volume, providing nationwide electronic platforms for trading in futures and options contracts on bullion, energy, base metals, and other non-agricultural commodities. MCX commenced commercial operations on 10 November 2003 under the regulatory jurisdiction of the Forward Markets Commission (FMC), and following the September 2015 FMC-SEBI merger, MCX has operated under the regulatory framework of the Securities and Exchange Board of India alongside the National Stock Exchange and the Bombay Stock Exchange .

How to compute commodity margin on Zerodha

Tue, 12 May 2026 00:00:00 +0000

Commodity margin on MCX is computed using the SPAN (Standard Portfolio Analysis of Risk) methodology, the same framework used for equity futures and options on NSE. Understanding how to calculate margin accurately before placing a trade prevents the two most common failure modes on commodity derivatives: the RMS auto-squareoff from a margin shortfall, and the shock of a mid-session margin call after an exchange SPAN revision.

This guide covers the full computation workflow using Zerodha’s SPAN calculator, the variables that drive margin levels, cross-margining for hedged positions, and the role of CTT and other charges in the overall cost calculation.

How to handle commodity physical delivery risk on Zerodha

Tue, 12 May 2026 00:00:00 +0000

Compulsory physical delivery is the defining characteristic that separates commodity futures from cash-settled derivatives like USDINR currency futures or equity index futures. On MCX , every non-agricultural commodity derivative – including crude oil, gold, silver, copper, zinc, aluminium, natural gas, and others – is subject to compulsory physical delivery if the open position is not closed before the contract’s tender period begins.

This guide explains the delivery mechanism, the timelines that matter, the consequences of default, and the step-by-step process for avoiding or managing delivery obligations on Zerodha .

How to trade crude oil futures on MCX via Zerodha

Tue, 12 May 2026 00:00:00 +0000

Crude oil futures on MCX are the most actively traded non-agricultural commodity derivatives in India. A single lot represents 100 barrels, providing leveraged exposure to global crude oil prices – largely anchored to WTI and Brent international benchmarks – denominated in Indian rupees. Zerodha provides direct access through Kite once the commodity segment is activated.

This guide covers the complete workflow from account setup to exit, including the critical physical-delivery risk that distinguishes commodity futures from cash-settled instruments such as USDINR currency futures.

How to trade gold mini futures on Zerodha

Tue, 12 May 2026 00:00:00 +0000

Gold Mini futures on MCX allow traders and hedgers to take leveraged positions on domestic gold prices with a contract size of just 10 grams – one-tenth of the standard Gold contract (100 grams). The smaller lot makes Gold Mini accessible to retail participants who need exposure to the gold market without committing the capital required for the full-size contract. Zerodha provides access through Kite once the commodity segment is activated.

This guide covers the entire workflow from activation to exit, including the critical physical-delivery obligations that apply if you hold a position to expiry.

How to trade silver micro futures on Zerodha

Tue, 12 May 2026 00:00:00 +0000

Silver Micro futures on MCX offer the smallest lot size in the MCX silver contract family: 1 kilogram per lot. Silver trades globally as both an industrial metal and a monetary metal, making its price more volatile than gold relative to its nominal value. The 1 kg Micro contract gives retail traders access to silver’s price movement with comparatively low capital, while the same compulsory-delivery obligation that applies to gold contracts applies here too.