Commodity derivatives on MCX
MCX lists futures and options on bullion (gold, silver), energy (crude oil, natural gas) and base metals (copper, zinc, aluminium). Contracts come in multiple sizes (e.g. Gold, Gold Mini, Gold Petal) so both hedgers and individuals can participate. Prices track global benchmarks and the USD/INR rate, and trading runs until late evening (up to 11:30/11:55 pm), letting you react to international moves.
Businesses use these to hedge — a jeweller locks input costs with gold futures; traders provide the liquidity. Physical delivery exists on some contracts, but most individual positions are squared off in cash.
Currency derivatives on NSE
Currency F&O trade on pairs like USD/INR, EUR/INR, GBP/INR and JPY/INR (lot size $1,000 for USD/INR). Importers and exporters hedge invoice risk; others trade the rupee’s moves with small margins. Note: SEBI/RBI rules require positions beyond set limits to be backed by underlying exposure — retail speculation limits are tighter than they used to be.
The risk picture
Commodity and currency futures are leveraged like equity F&O — margins of a few percent control a large contract, and daily mark-to-market applies. Crude and natural gas are among the most volatile contracts in India; overnight global moves can gap prices past your stop-loss.
Position-size conservatively, respect margin calls, and use the strategy tools on PCJ Invest.
Key terms
Hedging
Taking a derivatives position opposite to a real-world exposure to lock in a price.
Contango & backwardation
When futures trade above (contango) or below (backwardation) spot — matters when rolling positions.
Delivery intention
Some MCX contracts move to compulsory delivery near expiry — square off in time if you don’t want goods.
Tick size
The minimum price move of a contract; with lot size it defines rupee P&L per tick.
Test yourself
1. MCX evening sessions exist because…
Commodities track international markets, so trading extends to ~11:30 pm.
2. USD/INR lot size is…
One USD/INR lot is $1,000.
3. A jeweller buying gold futures to lock input cost is…
That is a classic hedge against a real exposure.
FAQs
No — enable the commodity segment on your existing PCJ account (a segment-modification form and margin apply).
Only on deliverable contracts with proper intent and logistics; most individuals square off in cash.
Energy commodities are typically the most volatile; currency pairs move less daily but leverage is higher. Both demand strict stops.
Futures and options are contracts whose value depends on an underlying asset — a stock, index, commodity or currency pair. A future is an agreement to buy or sell at a fixed price on a future date. An option gives you the right — but not the obligation — to do so, for a price called the premium. They are tools for hedging and trading, and they carry leverage, which magnifies both profit and loss.
Very. SEBI's own study found that about nine out of ten individual F&O traders lost money, with sizeable average losses. Leverage means a small market move against you can wipe out a large part of your capital. If you still want to trade derivatives, start small, learn payoff structures, always use stop losses, and never trade with money you cannot afford to lose.
Margin is the deposit the exchange requires you to keep with the broker to take a leveraged position. It ensures you can honour your obligations if the market moves against you. Margins change with volatility, and if your losses eat into the margin, you get a margin call asking for more funds — failing which the position may be squared off.
SEBI requires brokers to collect income proof before activating derivative segments because F&O involves leverage and is suitable only for investors who can bear the risk. A recent salary slip, six months' bank statement, ITR acknowledgement or demat holdings statement usually works.
Muhurat trading is a special one-hour trading session that exchanges hold on Diwali evening, considered an auspicious time to invest. The exact timing is announced by NSE and BSE each year. It is a symbolic session — liquidity is thinner than normal hours, so trade thoughtfully.
No. PCJ does not run a research desk and does not provide any investment advice, tips or recommendations. We provide the trading platform, market data and execution only; your Relationship Manager assists with account and service support, not with what to buy or sell. Every investment decision is entirely your own — SEBI registration and NISM certification do not guarantee returns, and no honest broker will promise them.
Educational content for general awareness only — not investment, trading or tax advice. Investments in securities market are subject to market risks; read all related documents carefully. Figures/rates are indicative for FY 2025-26 and may change.