InvestorQ : Is natural gas widely traded in India? Can I trade natural gas on MCX and if so how?
Akansha Shivdasani made post

Is natural gas widely traded in India? Can I trade natural gas on MCX and if so how?

Answer
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Crowny Pinto answered.
2 years ago


Natural gas is fast emerging a promising trade in the commodities market. As we earlier, there is almost a linear relationship between the price of natural gas globally and the domestic price. Since India is a minor player in the demand and supply of natural gas, Indian commodity markets depend more on global cues and global trends.

The standard trading unit lot size for trading natural gas on the MCX is 1250 mmbtu. At the current price of Rs.180/mmbtu of natural gas in India, the notional value of the lot works out to approximately Rs.225,000/-. Initial margins will be imposed at 5% including the SPAN margins and the extreme loss margins. This brings natural gas within the trading reach of most traders. There are typically 12 monthly natural gas contracts that are open at any point of time. The date of the expiry is not fixed but is announced by the exchange in advance but it will typically be around the last week of the calendar month.

Natural gas must not be looked at purely in terms of India’s role in the market. It is likely to remain a global product for quite some time. But the acceptance of natural gas is much keener now. The MCX futures may offer a good gateway to trade natural gas.