LEAD

Lot size: The size of one contract is 5 metric tonnes. This is the standard lead lot on MCX. Measuring equates to medium sizes accounts.

Tick size: The minimum price change is 5 paise per kg. The cost of one lot is ₹250 per tick. When trading size, it's the small moves that count.

Trading session: Trading runs Monday through Friday, from 9:00 a.m. to either 11:30 p.m. or 11:55 p.m., depending on US daylight saving time.

Contract expiry: The expiration date for LEAD contracts is the last calendar day of the expiration month. If that day is a holiday, the preceding working day. Please consult the schedule prior to entry.

Initial margin: At least 8% or as per SPAN, whichever is greater. This is clearly shown by Dhan before trading.

Mark-to-Market (MTM): They are settled by the closing price every day. Gains are credited. Losses are debited. Same day.

Open Interest (OI): Contracts still open. Not closed. With an increase in price, there must be an increase in OI, which signifies a fresh purchase. Increase in OI as price declines is a new shorting cycle.

Basis: Spot price minus futures price. This narrows as expiry approaches. A wide basis can signal arbitrage opportunities.

Daily Price Limit (DPL): The narrower slab is 4%. When breached, it relaxes to 6% without cooling off. If 6% is breached, after a 15-minute cooling period, it expands to 9%. Size your trades to survive limit hits.

Maximum order size: 100 MT. This caps how much you can place in a single order.

Quality specifications: The lead ingots are required to maintain a purity level of at least 99.98%. MCX-approved brands and LME-approved brands are both accepted.

Direct price exposure: You get the same lead price move as physical traders. Without the warehouse. Without the transport.

Hedging for battery makers: It helps manufacturers to secure the input costs. Recyclers can find the prices for scrap. This is a practical approach to risk management.

Transparency: MCX is SEBI-regulated. Prices are public. Settlement follows rules. The counterparty risk is low.

No physical handling: No storage warehouses are required. Quality certification is not required. If you decide to hold, the exchange will take care of delivery.

Liquidity: LEAD is an active base metal contract on MCX. Spreads are manageable. Entry and exit are smooth.

Directional trade: Purchase when you think lead prices will go up. Sell when you think they will drop. This is the easiest way. Relative position to the margin is key.

Calendar spread: Purchase one month's expiration. Sell another. Profit is determined by the difference in price from one month to the next, rather than the price itself. Lower margin. Higher returns than outright positions.

Hedging: Lead is a physical commodity, and a battery manufacturer has the physical lead stock to sell LEAD futures to lock-in prices. If it drops, the futures earnings compensate for the physical loss.

Basis trade: Speculate on the gap between Chennai spot and MCX futures. When the basis is wide, it may revert. This calls for knowledge of both markets.

Pair trade: Trade against another base metal, such as zinc or aluminum. If the ratio of any one pair of metals deviates from historic levels, then it may return. This minimises the direction of risk.

Range trade: Buy near support. Sell near resistance. This works at times when lead is range-bound. It fails when the trend reverses. Know when to stop.

Track auto sales data: Battery demand drives lead consumption. When car and two-wheeler sales rise, lead prices firm up. When sales slow, prices soften. Monthly SIAM data is your signal.

Watch LME inventory reports: Warehouse stock levels signal global balance. Falling stocks mean tightness. Rising stocks mean comfort. These reports are released weekly.

Monitor USD/INR movements: A weaker rupee pushes MCX prices up even if LME is flat. A stronger rupee caps gains. Currency is half the equation.

Check multiple chart timeframes: A trend visible on the daily chart may not match the one on the hourly chart. Align both before entering a position. Use Dhan's Custom Timeframes to set India-specific intervals.

Use the Dhan Trade Plan for position sizing: Trade Plan is a built-in tool on Dhan Charts. Enter your capital allocation percentage, risk percentage, and reward percentage. It calculates the exact quantity, stop loss level, and target price automatically. This removes guesswork from sizing.

Respect environmental policy shifts: China and India have both tightened smelter norms. These rules can remove the supply overnight. Track policy announcements from both countries.

Understand staggered delivery: The last 3 trading days involve compulsory delivery marking. On tender days, the delivery order rate is the closing price (weighted average of the last half an hour). On expiry, it is the DDR. If you do not want a physical settlement, exit before this window.

Square off before expiry if you do not want delivery: LEAD contracts involve physical settlement. Most retail traders do not take delivery. Exit well before the last trading day. Avoid complications.