MCX Launches mini crude oil future contract for trading

MCX (Multi Commodity Exchange of India Ltd) commenced trading in mini crude oil future contract from Jan 06, 2014 after getting approval from Forward Market Commission (FMC). The lot size of mini crude oil future contract is 10 barrels, whereas regular crude oil future contract comes with 100 barrels lot size. MCX can launch contracts for 6 months i.e Jan, Feb, Mar, Apr, May and Jun.

Regular crude oil future contract lot size of 100 barrels was too high for small traders and SME , which use this for hedging purpose. Availability of contract lot size with 10 barrels makes life easy for these players as they can do better risk management. The huge contract size and lot of volatility in crude price has created a risky environment for small time speculators and hedgers. This should be a good news for most of the market players.

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