Commodity Alert 🚨 Tender & Pre-Expiry Margin Update

Announcements
1

Good news for base metal traders :loudspeaker:
MCX has announced a key change that gives you more trading days.

What’s changed?

As per a recent MCX circular, the tender period for Base Metal futures has been reduced from 5 days to 3 days.

This applies to the following contracts:

  • Aluminium & Aluminium Mini

  • Copper

  • Lead & Lead Mini

  • Nickel

  • Steel Rebar

  • Zinc & Zinc Mini

What is the tender (pre-expiry) period?

The tender period is the window just before contract expiry during which traders can indicate their intent to give or take delivery of the commodity. On the expiry day, any open positions are settled either through physical delivery or cash settlement.

Because delivery risk and price volatility increase near expiry, this period is treated as high-risk, which is why exchanges impose higher margins.

Why do margins increase during the tender period?

As contracts near expiry:

  • Futures prices move closer to spot prices, increasing volatility

  • Physical delivery obligations come into play

  • Settlement risk rises

Higher margins help manage these risks and ensure only traders with genuine delivery intent remain, keeping the market stable and orderly.

What does this mean for Dhan commodity traders?

For base metals expiring from January 2025 onwards, the tender period will now begin 3 days before expiry instead of 5.

Since trading is not allowed during the tender period:

  • Earlier: Trading stopped on E-5 day

  • Now: Trading will stop on E-3 day

:backhand_index_pointing_right: This effectively gives traders two extra trading days before restrictions kick in.

What about margins?

Pre-expiry margins for base metals will now increase over 3 days instead of 5.
For example:

  • Jan 29: 8.34%

  • Jan 30: 16.68%

  • Jan 31 (Expiry): 25%

Any change for other commodities?

No.
All non–base metal commodities will continue to follow the 5-day tender period, starting from E-5 day.