NATURALGAS

Lot size: One standard contract represents 1,250 MMBtu.

Tick size: Minimum price movement is 10 paise per MMBtu. Each tick changes the contract value by ₹125.

Quotation: Prices are quoted in rupees per MMBtu.

Expiry: Contracts expire as per the MCX Contract Launch Calendar. The maximum contract duration is 6 months.

Trading hours: Standard trading hours run Monday through Friday, 9:00 AM to 11:30 PM. During periods of US daylight saving time, the closing time shifts to 11:55 PM.

Daily Price Limit (DPL): The initial circuit breaker sits at 4%. If breached, the limit widens to 6% without a cooling-off period. If 6% is breached, a 15-minute pause follows before expanding to 9%.

Initial margin: Minimum 10% or SPAN-based, whichever is higher. Extreme loss margin applies on top.

Open Interest (OI): Total outstanding contracts across all participants. Rising OI with rising price indicates fresh long positions. Rising OI with falling price indicates fresh shorting.

Position limits: Individual clients can hold up to 60,00,000 MMBtu or 5% of market-wide OI, whichever is higher, for all Natural Gas contracts combined. Members can hold 6,00,00,000 MMBtu or 20% of market-wide OI.

Maximum order size: 60,000 MMBtu per order.

Active role in worldwide energy cycles: You're impacted by the weather, storage and production fluctuations in the United States. You can trade these macro drivers without sourcing or even shipping physical gas with futures.

Leverage through margin: You put up just a portion of the contract amount as margin. This releases funds, but at the same time increases losses if positions are not handled correctly.

Cash settlement: No physical delivery obligations at expiry. The contract closes at the DDR, which is based on the NYMEX price of the contract.

Transparent, regulated infrastructure: The MCX is regulated by SEBI. Prices are public. Strict rules are in place for settlement. Risk from the counterparty is reduced via the clearing corporation.

Directional trade: Buy if you expect natural gas prices to rise. Sell if you expect them to fall. This is the simplest approach. Position size relative to margin is critical.

Calendar spread: Buy one expiry month. Sell another. Profit depends on the spread between months, not the absolute price. Lower margin. Lower volatility than outright positions.

Event-driven trade: Take positions ahead of EIA storage reports, NOAA weather outlooks, or hurricane forecasts. These trades require precise timing and awareness of implied volatility expansion before the event.

Weather-driven seasonal trade: Winter heating demand and summer cooling demand create predictable seasonal patterns. Traders position ahead of these cycles based on temperature forecasts and storage levels.

Track EIA storage reports every Thursday: The weekly storage levels build or draw provide the near-term guidance. Compare the actual number to consensus estimates. Things can change in minutes if there are surprises.

Take USD/INR into account in addition to NYMEX: The prices at the MCX keep going up through a depreciating rupee, even if the NYMEX price remains unchanged. Domestic gains are capped by a strengthening of the rupee and a rise at NYMEX. Manage both sides.

Follow temperature predictions from NOAA: Degree days for heating and cooling directly impact the demand. The so-called extended cold snap or extreme heat can drive price action through multiple sessions.

Account for daily MTM and margin calls: Forests are cleared every evening, and profits and losses are settled at the MCX. Natural gas can surprise EIA or be affected by weather events. Trade sizes that can prevent getting a margin call. Size based on the minimum margin.

Use multiple timeframe charts: The general trend that can be seen on the daily NATURALGAS futures chart may not match the hourly chart. Dhan's Custom and India timeframes enable you to sync both time frames prior to trading.

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

Monitor hurricane season risks: Atlantic storms can disrupt Gulf production and exports from June through November. Track storm development during these months.

Size positions within capital limits: The ability to take a large position with a small margin is not a reason to do so. Keep single-trade risk within a defined percentage of your total capital. Use the Trade Plan to enforce this discipline.