How to trade gold mini futures on Zerodha
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.
Regulatory and tax framework
Exchange and regulator
MCX is a SEBI-regulated exchange. SEBI assumed jurisdiction over commodity derivatives in September 2015 following the FMC-SEBI merger. Gold futures on MCX operate under SEBI’s (Stock Exchanges and Clearing Corporations) Regulations 2018 and MCX bye-laws.
Zerodha’s MCX membership and its commodity brokerage are covered in the Zerodha commodities article.
Commodity Transaction Tax
Non-agricultural commodity futures – including gold – attract Commodity Transaction Tax (CTT) at INR 10 per lakh of turnover on the sell side, introduced by the Finance Act 2013. Gold futures (both standard and mini) are subject to CTT. Currency derivatives are not.
Physical settlement mandate
SEBI circular SEBI/HO/CDMRD/DMP/CIR/P/2018/96 mandates compulsory physical delivery for commodity derivatives including gold. The MCX delivery specification for Gold Mini requires 10 grams of gold with a minimum purity of 995 fineness (99.5%), delivered at an MCX-empanelled vault.
Contract specifications
| Parameter | Detail |
|---|---|
| Exchange | MCX |
| Contract | Gold Mini Futures |
| Lot size | 10 grams |
| Price quotation | INR per 10 grams |
| Tick size | INR 1 per 10 grams |
| Tick value | INR 1 x 1 = INR 1 per lot per tick |
| Contract months | Five near-monthly and two bi-monthly contracts |
| Last trading day | Fifth day of the contract month (or preceding business day) |
| Tender period | Begins approximately three business days before the last trading day |
| Settlement | Compulsory physical delivery at MCX-accredited vaults |
| Delivery unit | 10 grams per lot; gold must be 995 fineness |
| Trading hours | 9:00 AM to 11:30 PM IST (Monday to Friday) |
| Daily price limit | 4 percent initially; relaxed to 6 percent and then no limit if triggered |
For comparison, the Gold standard contract has a lot size of 100 grams (one kg-bar divided into 100 gram units), and Gold Petal has a lot size of 1 gram. Gold Mini at 10 grams sits between the two.
Step-by-step procedure
Step 1: Activate the commodity derivatives segment
Log in to Zerodha Console and go to Profile > Segments. If the Commodity row is inactive, click Activate. Upload income proof (payslip, bank statement, or ITR acknowledgement) if prompted. The how-to guide for activating the commodity segment provides the full document checklist.
Step 2: Transfer sufficient funds
In Kite, go to Funds > Add funds. Calculate the total margin needed for your intended number of Gold Mini lots (see step 4) and add at least 15–20 percent extra. Gold prices can swing INR 200–600 per 10 grams on days with major price drivers (US CPI data, Federal Reserve meetings, geopolitical news).
Step 3: Search for the Gold Mini contract
In the Kite search bar, type GOLDM (not GOLD – that will return the standard 100-gram contract) and press Enter. Select MCX from the exchange filter. Contract names follow the format GOLDM26JUNFUT (June 2026 expiry). Add the near-month contract to your watchlist.
The near-month contract has the highest liquidity. If you are hedging a longer-dated physical gold purchase or sale, check the open interest in the relevant expiry before choosing a far-month contract.
Step 4: Check the margin requirement
Go to zerodha.com/margin-calculator/SPAN/ and click the MCX tab. Select GOLD MINI, enter the number of lots, and read the margin figures.
At a gold price of approximately INR 75,000–80,000 per 10 grams (illustrative), typical margin levels are:
| Lots | Approx. SPAN | Approx. Exposure | Approx. Total |
|---|---|---|---|
| 1 | INR 3,500–5,500 | INR 600–1,200 | INR 4,100–6,700 |
| 5 | INR 17,500–27,500 | INR 3,000–6,000 | INR 20,500–33,500 |
| 10 | INR 35,000–55,000 | INR 6,000–12,000 | INR 41,000–67,000 |
Margin levels rise during high-volatility periods. The exchange publishes updated SPAN files intraday; Zerodha’s margin calculator refreshes periodically. For a detailed explanation of SPAN methodology, see how to calculate SPAN margin on Zerodha.
Step 5: Place the order
Click the Gold Mini contract in your watchlist. Press B (buy) for a long position (profit if gold price rises) or S (sell) for a short position (profit if price falls).
In the order form:
- Product: NRML for overnight; MIS for intraday (auto-squareoff before MCX close).
- Order type: Limit (recommended) or Market.
- Quantity: in lots (each lot = 10 grams).
- Price: in INR per 10 grams, to the nearest tick (INR 1).
Example: if Gold Mini is quoting at INR 76,450 per 10 grams and you want to buy 2 lots at limit INR 76,400, enter quantity 2 and price 76400.
Step 6: Monitor the open position and daily MTM
Open the Positions tab in Kite. Unrealised P&L is updated continuously:
- Long P&L per lot = (Current price - Entry price) x 1 (lot size in the price-quotation unit)
- Short P&L per lot = (Entry price - Current price) x 1
Since the lot size is 10 grams and the price is quoted per 10 grams, a INR 100 move in price equals a INR 100 P&L per lot.
Daily MTM settlement: at end of day the exchange debits or credits the difference between the Daily Settlement Price (DSP) and your trade price (or previous DSP) from your ledger. The DSP for Gold Mini is the volume-weighted average of trades in the last 30 minutes of the evening session.
Step 7: Square off, roll, or accept delivery
To square off before the tender period, click Exit in the Positions tab. Submit a counter-order (sell if long, buy if short) as a limit or market order.
To roll to the next expiry, square off the current contract and simultaneously (or promptly) buy the next-month contract. Rolling Gold Mini is common because delivery obligations are burdensome for retail traders.
If holding to expiry: the exchange will match you with a counterparty during the tender period. You must deliver or accept 10 grams of gold (995 fineness) at an MCX-accredited vault. This involves significant logistics and cost for individual traders. Zerodha will square off open positions that do not meet delivery pre-qualification, potentially at unfavourable prices. See how to handle commodity physical delivery risk on Zerodha for the complete procedure.
Charges on MCX Gold Mini futures
| Charge | Rate |
|---|---|
| Brokerage (Zerodha) | INR 20 or 0.03% of turnover, whichever is lower, per order |
| CTT | INR 10 per lakh of sell-side turnover |
| STT | Nil on commodity futures |
| MCX transaction charge | Approximately INR 200 per crore of turnover |
| SEBI turnover fee | INR 10 per crore of turnover |
| GST | 18% on brokerage and transaction charges |
| Stamp duty | As per state of registration (typically INR 0.002 per lakh for futures) |
See Zerodha commodities and commodity transaction tax for current rates.
What can go wrong
- Wrong contract selected. Kite’s search returns GOLD (100 grams), GOLDM (10 grams), and GOLDPETAL (1 gram). Confirm the contract name and lot size in the order window before submitting. The margin requirement differs by an order of magnitude.
- Import duty changes. The Government of India periodically revises gold import duty, affecting domestic gold prices independently of global spot. Sudden duty changes can gap prices at open.
- INR/USD movements. Since gold trades globally in USD, a sharp INR depreciation raises domestic gold prices in INR even if international prices are flat. Monitor the USD/INR rate alongside gold.
- Tender period entry. The most serious risk for retail traders. MCX’s last trading day for Gold Mini is typically the fifth of the month. The tender period begins approximately three working days before. Square off by the last day of the previous month at the latest.
- Low liquidity in far-month contracts. Beyond the near-month and one or two adjacent months, Gold Mini open interest drops sharply. Wide bid-ask spreads increase the effective cost of entry and exit in far-month contracts.
- RMS auto-squareoff on margin shortfall. A INR 300–500 per 10-gram intraday move on days with major catalysts can deplete margin on multiple lots rapidly. Maintain a margin buffer well above the SPAN minimum.
Conflict-of-interest disclosure
The WebNotes Editorial Team has no financial relationship with Zerodha, MCX, or any commodity broker. No brokerage referral arrangement exists. Charge figures are drawn from publicly available exchange and broker documentation and may change; verify current rates before trading.
Related guides
- Zerodha commodity segment
- Zerodha MCX membership
- How to activate the commodity segment on Zerodha
- How to trade crude oil futures on MCX via Zerodha
- How to trade silver micro futures on Zerodha
- How to handle commodity physical delivery risk on Zerodha
- How to compute commodity margin on Zerodha
- How to calculate SPAN margin on Zerodha
- MCX
- Zerodha commodities
- Commodity transaction tax
- SEBI
- Kite, Zerodha’s trading platform
References
- MCX Contract Specifications: Gold Mini Futures, 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.
- Finance Act 2013, Section 116, Commodity Transaction Tax, Ministry of Finance, Government of India.
- London Bullion Market Association (LBMA), Gold price methodology and benchmark, lbma.org.uk.
- MCX Bye-Laws and Business Rules (current version), mcxindia.com.
- SEBI (Stock Exchanges and Clearing Corporations) Regulations 2018, Schedule IX, commodity derivatives framework.
- Zerodha support article: “Commodity derivatives on Zerodha”, support.zerodha.com.
- SEBI Circular SEBI/HO/CDMRD/DMP/CIR/P/2021/020, Margining framework for commodity derivatives, Securities and Exchange Board of India.