The recently launched kapas futures on the Multi Commodity Exchange (MCX) have become a hit, with the April delivery futures clocking an average daily turnover and volume of Rs 22.78 crore and 10644 tonnes respectively. | |
| The open interest position has hit a high of 1000 tonnes in a short span of seven days. The contract for this season was launched on August 16 for its maturity on April 30, 2008. |
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| The annual kapas contract on the platform is launched around mid-August every year for one time delivery in April next year. |
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| Last year, the April 2007 contract witnessed a total trade volume of 10 lakh tonnes and turnover of Rs 2005 crore. The open interest was witnessed at 10,200 tonnes which was settled by cash. |
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| The kapas futures on many well-known platforms like East India Cotton Association is yet to see its first click since the launch of contract years ago. |
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| For the new contract, no changes have been made in the contract specifications, the variety of kapas being fair average Kalyan cotton of Gujarat 13 variety and/or V 797, which can be either hand or machine made. The minimum lot size is 4 tonnes and the unit of price quotation is in rupees per 20 kg ex-Surendranagar, exclusive of all taxes and levies. |
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| The unique feature of kapas is that it is a 'bandhani' contract that protects market participants from exposure to unlimited losses under extreme volatile market scenarios. It enables the market participants to know their maximum possible profits or losses at any given point in time during the lifetime of the contract. |
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