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MUMBAI: MCX, the country’s largest commodity exchange, which reported a 60 percent decrease in daily turnover after the reduction in trading hours, saw turnover more than double to nearly Rs 20 billion after the restoration from normal trading hours last week.
Following the coronavirus pandemic, Sebi had reduced business hours from 10 a.m. at 5 p.m., compared to the previous hours of 9 a.m. at 11.30 p.m. As a result, the daily turnover fell sharply to Rs 10 billion rupees from around Rs 48 billion rupees earlier.
“Our turnover more than doubled to more than Rs 20,000 crore on April 30, when full trading hours were restored. When trading hours were shortened, it was below Rs 10 billion rupees. In the second Day of full trading hours on May 4, the turnover touched Rs 19,049 crore at the close.
“We hope to regain high turnover as the market returns to normal,” MCX CEO and Chief Executive Officer P S Reddy told PTI.
In general, billing doubles more than 5 pm when international markets open. For example, on May 4, turnover was only Rs 8,683 crore at 5 p.m., but it jumped to Rs 19,049 crore at the close at 11:30 p.m.
The market closed on May 1, 2 and 3.
Without offering a timeline to achieve previous high levels of turnover, Reddy said that for trade to normalize, physical markets have to normalize first. For markets to normalize, coronavirus-induced disruptions have to come to an end, he added.
Only when the physical markets fully open can trade recover. Currently, the volume of the exchange is down more than 50 percent for both crude and bullion, which make up 40 percent of total business turnover, he said.
In the sharp rise in risk spreads last week, Reddy said it had no impact on volume as brokers were already charging higher spreads to their clients.
Last week, MCX, which controls more than 94 percent of the volume and turnover of raw materials, announced that it would charge up to 125 percent or Rs 1.95,000 per lot if the price falls to 90 percent.
Last month, the stock market came under legal scrutiny after it allowed crude futures to settle at negative prices on April 21. In what could be called historical, May crude oil futures contracts fell 305 percent on the New York Mercantile Exchange on April 20 and finally settled at – $ 37.69 per barrel as traders had no storage facilities. to receive delivery.
Consequently, MCX, which links its prices to Nymex rates, set the trade at -Rs 2,884 per barrel. This forced several of its brokers to drag the exchange and its clearing corporation to four higher courts: Bombay, Delhi, Hyderabad and Gujarat.
So far, neither court has suspended the price liquidation decision or granted provisional relief to brokers.
Meanwhile, MCX came out with an exit option for merchants, as it has not yet changed its software to allow negative prices if prices become negative again. The exchange has also clarified that the option would be prospective and would not affect the settlement of previous contracts.
The exit option would be offered to traders if the Nymex contract hits negative territory again, MCX said over the weekend.
When asked about the software change, which EEB had already made days after the April 21 line, Reddy declined to offer a timeline, but said “the work is well advanced.”
“I cannot offer a timeline for when the technical work of changing our software to allow negative pricing will be completed. All I can say is that it is highly activated and will be done as soon as possible,” he said.
The exchange is consulting with its software provider 63 Moons, formerly Financial Technologies and the original promoters of MCX, to enable the negative pricing option.
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Following the coronavirus pandemic, Sebi had reduced business hours from 10 a.m. at 5 p.m., compared to the previous hours of 9 a.m. at 11.30 p.m. As a result, the daily turnover fell sharply to Rs 10 billion rupees from around Rs 48 billion rupees earlier.
“Our turnover more than doubled to more than Rs 20,000 crore on April 30, when full trading hours were restored. When trading hours were shortened, it was below Rs 10 billion rupees. In the second Day of full trading hours on May 4, the turnover touched Rs 19,049 crore at the close.
“We hope to regain high turnover as the market returns to normal,” MCX CEO and Chief Executive Officer P S Reddy told PTI.
In general, billing doubles more than 5 pm when international markets open. For example, on May 4, turnover was only Rs 8,683 crore at 5 p.m., but it jumped to Rs 19,049 crore at the close at 11:30 p.m.
The market closed on May 1, 2 and 3.
Without offering a timeline to achieve previous high levels of turnover, Reddy said that for trade to normalize, physical markets have to normalize first. For markets to normalize, coronavirus-induced disruptions have to come to an end, he added.
Only when the physical markets fully open can trade recover. Currently, the volume of the exchange is down more than 50 percent for both crude and bullion, which make up 40 percent of total business turnover, he said.
In the sharp rise in risk spreads last week, Reddy said it had no impact on volume as brokers were already charging higher spreads to their clients.
Last week, MCX, which controls more than 94 percent of the volume and turnover of raw materials, announced that it would charge up to 125 percent or Rs 1.95,000 per lot if the price falls to 90 percent.
Last month, the stock market came under legal scrutiny after it allowed crude futures to settle at negative prices on April 21. In what could be called historical, May crude oil futures contracts fell 305 percent on the New York Mercantile Exchange on April 20 and finally settled at – $ 37.69 per barrel as traders had no storage facilities. to receive delivery.
Consequently, MCX, which links its prices to Nymex rates, set the trade at -Rs 2,884 per barrel. This forced several of its brokers to drag the exchange and its clearing corporation to four higher courts: Bombay, Delhi, Hyderabad and Gujarat.
So far, neither court has suspended the price liquidation decision or granted provisional relief to brokers.
Meanwhile, MCX came out with an exit option for merchants, as it has not yet changed its software to allow negative prices if prices become negative again. The exchange has also clarified that the option would be prospective and would not affect the settlement of previous contracts.
The exit option would be offered to traders if the Nymex contract hits negative territory again, MCX said over the weekend.
When asked about the software change, which EEB had already made days after the April 21 line, Reddy declined to offer a timeline, but said “the work is well advanced.”
“I cannot offer a timeline for when the technical work of changing our software to allow negative pricing will be completed. All I can say is that it is highly activated and will be done as soon as possible,” he said.
The exchange is consulting with its software provider 63 Moons, formerly Financial Technologies and the original promoters of MCX, to enable the negative pricing option.
