 "MCX levies concentration margin from December 1")
Commodities exchange MCX on Friday said it would impose a concentration margin, effective from December 1.
The Securities and Exchange Board of India (Sebi) had mandated commodity exchanges impose concentration margin with increase in open interest positions.
This was done to ensure some big players didn’t corner positions to manipulate prices.
The clearing member’s open interest in the contract shall be compared with the market-wide open interest in a given contract and based on that, margins would be levied.
The Securities and Exchange Board of India (Sebi) had mandated commodity exchanges impose concentration margin with increase in open interest positions.
This was done to ensure some big players didn’t corner positions to manipulate prices.
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The MCX decided to introduce concentration margin as an additional risk management measure. The concentration margin will be levied at the clearing member-level based on contracts in which the open interest value exceeds the threshold value of Rs 250 crore and it shall be applicable at the contract level.
The clearing member’s open interest in the contract shall be compared with the market-wide open interest in a given contract and based on that, margins would be levied.
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