MCX does away with large-lot metal contract following Sebi directive

All contracts to be in lot size of one tonne starting January 2020; Exchange also awaits regulator's nod to launch index-based derivatives

The Multi Commodities Exchange has decided to introduce uniform delivery lots across all its metal and energy contracts, following a circular by the regulator, Securities and Exchange Board of India, to this effect.

Accordingly the exchange had de-listed all copper and nickel contracts, save those of one tonne. From January, new contracts in Zinc, aluminium and lead will only be in lot sizes of one tonne. At present, the nickel contract has a lot size of 1.5 tonnes and while copper is traded in a lot size of 2.5 tonnes.

The move is aimed at ensuring all speculative bets are concentrated in one contract per commodity and can be tracked easily. The measure would also avoid division of positions among many contracts of the same commodity. MCX has already done this for the energy segment.

MCX has avoided large contracts with a lot size of five tones and has preferred smaller lot sizes to attract SME participants, the official said.

It is also awaiting the regulator's nod to launch the much-talked-about trading in index-based derivatives.