 "After April fiasco, MCX to allow negative price trading from July 27")
India's largest commodities exchange, MCX, has said in a circular that it will go live with new trading software that allows trading at negative prices.
The issue became sensitive after crude oil futures settled at a negative price on April 20, causing huge losses to many players.
While that incident was a one-off, and there was no other case of negative price trading in any of the Indian bourses, none of the Indian bourses at that time was equipped with software to accommodate negative quotes. They could, at best, display a price of one rupee on their trading platforms.
Soon after that fiasco, BSE's commodity segment made provisions to permit negative trading, and now MCX is going live With the mechanism on July 27.
The exchange stated in the circular, "The upgraded software version comes with a feature to accept negative bids. In order to familiarise traders and members with the working of the new software, MCX conducted mock trading sessions on July 11 and July 18, without any adverse observation from members."
The exchange said the next mock trading session would be conducted on July 25.
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