Latest news with #ElectricityFuturesContract
Business Standard
4 days ago
- Business
- Business Standard
MCX launches Electricity Futures Contract
With effect from 10 July 2025 Multi Commodity Exchange of India announced the launch of the Electricity Futures Contract, effective from Thursday, 10 July 2025, marking a significant milestone in the development of the country's energy derivatives market. MCX believes this launch is timely, as the electricity sector is witnessing significant growth with a need to manage price stability, fluctuating demand, fuel costs, and market developments. The Electricity Futures contract will help power generators, distribution companies, large industrial consumers, and financial participants with a transparent, liquid, and reliable hedging mechanism. It will also promote investors with a widely used commodity to add to their portfolio. The new Electricity Futures Contract aims to meet the growing demand for structured electricity price risk management instruments. The contract will be available for all 12 calendar months of the year, with trading initially open for the current and next three months. The trading unit is 50 MWh, quoted in Indian Rupees per MWh (excluding taxes and levies), with a tick size of ₹1 per MWh. The contract will be cash settled based on the Volume Weighted Average of the Unconstrained Market Clearing Price (UMCP) of the Day Ahead Market (DAM) at the Indian Energy Exchange (IEX) for all calendar days in the expiry month. The contract will follow SEBI's Daily Price Limits (DPL) for market stability, with an initial slab of 6%, extendable up to 9% on a given day. The initial margin requirement is a minimum of 10% or volatility VaR based margins, whichever is higher. Client level position limits are capped at 3 lakh MWh or 5% of the market-wide open interest whichever is higher.
Business Upturn
4 days ago
- Business
- Business Upturn
MCX to launch India's first Electricity Futures after SEBI approval
The Multi Commodity Exchange of India Ltd. (MCX), India's largest commodity derivatives exchange and the world's leading commodity options exchange (FIA, 2024), is set to launch Electricity Futures Contracts on Thursday, July 10, 2025. The move follows the Securities and Exchange Board of India's (SEBI) recent approval in June 2025 and marks a major step toward deepening India's energy derivatives market. This new electricity derivative will offer a vital hedging tool to power generators, distribution companies (discoms), large industrial users, and financial market participants. Amid rising electricity demand, volatile fuel prices, and evolving energy market dynamics, MCX sees this launch as timely and essential for risk management and price discovery. The Electricity Futures Contract will: Be traded in 50 MWh lots Be quoted in INR per MWh (excluding taxes and levies) Be available for all 12 calendar months, with trading initially open for the near four months Be cash settled based on the Volume Weighted Average of the Unconstrained Market Clearing Price (UMCP) in the Day Ahead Market (DAM) at Indian Energy Exchange (IEX) SEBI's Daily Price Limits (DPL) will apply, starting at 6% and extendable to 9%. Margins are set at a minimum of 10% or volatility-based VaR, whichever is higher. Client-level open positions are capped at 3 lakh MWh or 5% of total market-wide open interest—whichever is higher. The introduction of electricity futures is expected to bring greater liquidity, transparency, and depth to India's evolving power market, while also offering investors a new avenue for portfolio diversification. Ahmedabad Plane Crash Aman Shukla is a post-graduate in mass communication . A media enthusiast who has a strong hold on communication ,content writing and copy writing. Aman is currently working as journalist at
