MCX additional margins as a cost of carry

Sat, 20 Jun 2026 00:00:00 +0000

MCX additional margins are the extreme loss margin, additional or ad-hoc margin, tender-period and delivery-period margins, and pre-expiry margin that the Multi Commodity Exchange and its clearing corporation levy on a commodity futures position over and above the SPAN initial margin. They are blocked capital, not a charge: the money is returned when the position is closed or settled. What they cost the trader is the use of that capital for the days it stays locked, a cost of carry rather than a fee on the contract note.

Extreme Loss Margin (ELM)

Sun, 17 May 2026 00:00:00 +0000

Extreme Loss Margin (ELM) is an additional initial-margin layer levied by Indian clearing corporations and exchanges on top of the scenario-based margin components (SPAN margin for derivatives, value-at-risk margin for cash equities) and exposure margin . ELM is calibrated by SEBI to cover statistically extreme adverse price moves that the scenario-based methodologies, however well-calibrated, can miss. Where SPAN’s price-scan range targets approximately 99 per cent confidence in covering daily price moves, ELM extends the margin requirement to cover the residual 1 per cent tail of more extreme moves.

Extreme Loss Margin on WebNotes

MCX additional margins as a cost of carry

Extreme Loss Margin (ELM)