MCX commences trading in Kapas April 2007 contract

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For the third successive year, MCX (Multi Commodity Exchange of India Ltd.) has launched futures trading in Kapas (known as raw-cotton or seed cotton) April 2007 contract.

 

The Bandhani Price (floor limits for the life of the contract) is available for futures trading. Variety of Kapas permitted as per the contract specification is a fair average Kalyan Cotton of Gujarat 13 variety and/or V-797 variety.

 

Whenever, the daily price limit is hit, the daily price limit would be relaxed up to 6 per cent, as per the direction of Forward Markets Commission (FMC).

 

Mr. Jignesh Shah, MD & CEO, MCX, said, "Futures trading in Kapas is likely to give an effective tool to farmers and traders to hedge their price risk. Majority of traders was awaiting this contract and the exchange has initially received widespread participation from major cotton trading centres." 

 

Daily price limit is 3 per cent and Initial margin is 4 per cent. Tick size is 10 paise. In case of additional volatility, a special margin at such percentage, as deemed fit, would be imposed immediately on both buy and sale side.

 

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