Commodity derivatives MCX expiry tender period delivery period near-month far-month contract roll MCX Zerodha

How long MCX contracts can be held

From WebNotes, a public knowledge base. Last updated 21 June 2026. Reading time ~13 min.

Key facts

Exchange	Multi Commodity Exchange of India (MCX), SEBI-regulated
Contract life	Each contract is a dated series; held only until its last trading day
Series available	Several near-month and far-month monthly contracts listed at once
Tender period	Begins several working days before the last trading day for delivery-settled contracts
Settlement at expiry	Compulsory physical delivery for non-agricultural commodities (SEBI, 2018); cash for natural gas
Holding longer	Achieved by rolling: square off the near-month and open a far-month contract

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.

The question of how long a contract can be held matters because the back end of a contract’s life carries the tender and delivery period, the window in which a delivery-settled contract can assign a physical-delivery obligation. A retail trader who misreads the expiry cycle and holds a gold or crude oil position into the tender period faces a delivery obligation they cannot meet. This article sets out the contract cycle, the near-month versus far-month structure, the tender and delivery period, the cash-settlement exception for natural gas, and the roll mechanic that is the correct way to extend a position.

Conflict-of-interest disclosure. This article is published by the WebNotes Editorial Team for informational purposes and is written independently. WebNotes operates a Zerodha account-opening referral programme, disclosed on the pages that carry the referral link; this article does not carry it and earns no referral commission from anything described here. All figures cite publicly available MCX and SEBI documentation and may change; verify current specifications before trading.

A contract is a dated series, not an open holding

The first thing to understand is that an MCX commodity contract is not like a stock that can sit in a portfolio for years. Each contract is a dated monthly series with a fixed last trading day. A gold mini June contract is a different instrument from the gold mini July contract; the June contract ceases to exist after its last trading day. The holding period of any single contract is bounded by that day.

MCX lists several monthly series for each commodity at once. At any time a trader can see the near-month contract, the next month, and one or more later months, each with its own expiry. The contract code on Kite carries the month, so a trader is always buying a specific dated contract, not an open-ended position in the commodity.

The expiry dates vary by commodity. The bullion contracts expire around the fifth of the contract month: the gold mini contract, for example, runs from the sixth of the launch month to the fifth of the expiry month. The crude oil and other energy contracts expire near the end of the contract month, with natural gas at the 25th. The specific last trading day is on the MCX contract specification and the Kite contract details; it should be read for the exact contract being traded, not assumed.

Near-month and far-month

The listed series split into the near-month, the contract with the earliest expiry, and the far-month contracts that expire later.

The near-month contract carries the highest open interest and the tightest bid-ask spread. Almost all retail volume concentrates there, because it is the most liquid contract and the one with prices that move with the underlying. A trader entering an MCX position normally enters the near-month.

Far-month contracts expire later but trade thinly. Open interest drops sharply beyond the near-month and the adjacent month, so the bid-ask spread widens and a fill becomes more expensive. A far-month contract gives a longer life before expiry, but the cost is the wider spread and the thinner liquidity. For most retail traders the near-month is the right contract, and a longer exposure is built by rolling rather than by holding a far-month.

Attribute	Near-month	Far-month
Expiry	Earliest	Later
Open interest	Highest	Lower, thinning with distance
Bid-ask spread	Tightest	Wider
Typical retail use	Default contract	Rare, for specific hedging needs
Time before expiry	Shortest	Longer

The tender and delivery period

The back end of a delivery-settled contract’s life is the tender period, also called the delivery period. It begins several working days before the last trading day. During the tender period the exchange can assign delivery obligations to open positions, matching buyers who must take delivery with sellers who must give it.

This is the window a retail trader must stay out of. SEBI circular SEBI/HO/CDMRD/DMP/CIR/P/2018/96 dated 12 June 2018 made physical delivery compulsory for non-agricultural commodity derivatives on expiry, removing the earlier cash-settlement option. A gold, silver, or crude oil position carried into the tender period can be assigned an obligation to take or give delivery of the physical commodity from an MCX-accredited vault or delivery centre. A retail trader cannot meet a vault delivery obligation in practice, and the consequence is a forced square-off by Zerodha’s risk desk for positions that have not been closed and that do not meet delivery pre-qualification, potentially at unfavourable prices, plus possible exchange delivery-default penalties. The full handling is in how to handle commodity physical delivery risk on Zerodha .

The practical rule is to exit or roll before the tender period opens, which means a few trading days before the last trading day, with a margin for safety. The gold mini and crude oil how-to guides advise squaring off at least three to five trading days before the last trading day for exactly this reason.

The natural gas exception

Not every MCX contract carries a delivery obligation. Natural gas and natural gas mini are cash-settled. A position held to the last trading day on natural gas settles in cash against the MCX due-date rate, derived from the NYMEX Henry Hub settlement price, with no physical-delivery scramble. The detail is in natural gas futures on MCX via Zerodha . A trader who forgets to square off a natural gas position simply takes the cash settlement; the same lapse on gold or crude oil triggers the delivery obligation. The settlement basis of the specific contract, cash or delivery, decides how serious it is to be caught holding into expiry.

Holding longer: the roll

To stay in a trade beyond a single contract’s expiry, a trader rolls. The roll is two trades: square off the expiring near-month contract and open the same position in a later contract. A trader long one gold mini June lot who wants to stay long into July squares off the June contract and buys the July contract.

The roll has costs. There is brokerage and the other transaction charges on both legs, and there is the spread between the two months, the difference in price between the expiring and the next contract, which can move against the trader. Rolling is done before the tender period and before liquidity in the expiring contract thins, typically a few trading days ahead of the last trading day, so the exit leg gets a clean fill. The procedural detail of rolling a position is in how to rollover an F&O position on Zerodha .

Rolling is the answer to “how do I hold an MCX position for several months”. The position is held continuously, but through a sequence of monthly contracts rather than one long-dated holding. Each month the near-month is squared off and the next contract opened, and the cumulative cost is the sum of the roll spreads and the transaction charges over the holding period.

What decides the holding period

Three things bound how long a given MCX position can be held. The contract’s last trading day sets the hard limit; nothing can be held past it. The tender period sets the practical limit for delivery-settled contracts; a retail trader must be out before it opens, which is a few days earlier. And liquidity sets the comfortable limit; as the near-month approaches expiry, volume migrates to the next month, so the cleanest exit is before the expiring contract thins. A trader who treats these three as the same date, the last trading day, leaves it too late; the working deadline is the tender period, and the comfortable deadline is a few days before that.

Margins through the contract life

The margin on an MCX position does not fall as the contract ages, and it can rise. The exchange can raise SPAN parameters and impose additional or special margins as expiry approaches on delivery-settled contracts, and delivery margins ramp up in the tender period to discourage retail positions from drifting into delivery. A trader carrying a position toward expiry should expect the margin requirement to increase, not decrease, which is a further reason to roll early rather than hold into the tender window. The margin structure is in energy futures margins on Zerodha , SPAN margin on Zerodha , and exposure margin on Zerodha .

External references

References

MCX Contract Specifications and Settlement Calendar, Multi Commodity Exchange of India Ltd, mcxindia.com.
SEBI Circular SEBI/HO/CDMRD/DMP/CIR/P/2018/96 dated 12 June 2018, Compulsory delivery in commodity derivatives, Securities and Exchange Board of India.
SEBI Circular SEBI/HO/CDMRD/DMP/CIR/P/2021/020, Margining framework for commodity derivatives, Securities and Exchange Board of India.
MCX Bye-Laws and Business Rules, Multi Commodity Exchange of India Ltd (current version), mcxindia.com.
SEBI Master Circular for Commodity Derivatives, Securities and Exchange Board of India.

Frequently asked questions

How long can I hold an MCX commodity contract?

Only until that contract’s last trading day. Each MCX contract is a dated monthly series, not an open-ended holding. To stay in the trade beyond the expiry, you roll: square off the near-month contract and open a far-month one.

What is the tender period on MCX?

The tender period, also called the delivery period, begins several working days before the last trading day on delivery-settled contracts. During it the exchange can assign delivery obligations, so a retail trader must square off or roll before the tender period opens.

What is the difference between near-month and far-month contracts?

The near-month contract is the earliest expiry, with the highest liquidity and tightest spread. Far-month contracts expire later and trade thinly. Most retail volume is in the near-month, so traders roll from near-month to near-month rather than holding a far-month.

What happens if I hold an MCX contract to expiry?

For non-agricultural commodities like gold, silver, and crude oil, holding to expiry triggers a compulsory physical-delivery obligation. Natural gas is cash-settled instead. A retail trader who cannot deliver faces a forced square-off by the broker and possible exchange penalties.

How do I hold an MCX position for several months?

By rolling. You cannot hold one contract for months because it expires monthly. You square off the expiring contract and open the next month’s contract before the tender period, repeating each month. Each roll has transaction costs and a spread between the two months.

When should I roll an MCX contract?

Roll at least a few trading days before the last trading day, before the tender period opens and before liquidity in the expiring contract thins. Rolling too late risks a poor fill or entering the delivery window, which a retail trader must avoid.

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WebNotes Editorial Team

The WebNotes Editorial Team covers Indian capital markets, payments infrastructure and retail investor procedures. Every article is fact-checked against primary sources, principally SEBI circulars and master directions, NPCI specifications and the official support documentation published by the intermediary in question. Drafts go through a second-pair-of-eyes review and a separate compliance read before publication, and revisions are tracked against the SEBI and NPCI rule changes referenced in the methodology section.

Last reviewed: 21 June 2026
Conflicts of interest: WebNotes is independent. No relationship with any broker, registrar or bank named in this article.