NICKEL

Lot size: One standard contract represents 250 kilograms.

Tick size: Minimum price movement is 10 paise per kg. Each tick changes the contract value by ₹25.

Quotation: Prices are quoted ex-warehouse Thane, excluding GST only.

Expiry: Contracts expire on the third Wednesday of the contract month. If that day is a holiday, the preceding working day applies.

Trading hours: You can trade Monday through Friday between 9:00 AM and 11:30 PM. When the US is on daylight saving time, the market stays open until 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 1,000 MT or 5% of market-wide OI, whichever is higher, for all Nickel contracts combined. Members can hold 10,000 MT or 20% of market-wide OI.

Maximum order size: 24 MT per order.

Delivery unit: 1,500 kg with a tolerance limit of plus or minus 10%. Quality standard requires 99.80% purity nickel cathodes. Only LME-approved brands are accepted.

Macro participation without physical exposure: Nickel is affected by mining policy, industrial growth, currency transfers and the demand for batteries. Instead of buying or storing physical cathodes, futures provide a way to take part in the price movements.

Leverage through margin: You trade just a portion (a percentage) of the value of the contract as margin. This releases cash flow but also can magnify losses if not managed appropriately.

Hedging for commercial users: Nickel price risk for stainless steel producers, battery companies and alloy producers. The futures contracts on MCX state the cost of goods or the selling price. The operational hedging is strengthened using a compulsory delivery design.

Transparent, regulated infrastructure: MCX is regulated by SEBI. Prices are public. There is a strict rule for settlement. The clearing corporation is used to minimise the counterparty risk.

Delivery infrastructure: Compulsory delivery at expiry ensures convergence between futures and spot. Sellers deliver 99.80% purity nickel cathodes. Buyers receive LME-approved brands with quality certification.

Directional trade: Buy if you expect nickel 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.

Hedging: A stainless steel producer with physical nickel stock can sell NICKEL futures to lock prices. If nickel falls, the futures profit offsets the physical loss.

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

Track LME alongside MCX: Domestic nickel prices don't move independently of global cues. LME direction typically sets the broader tone, and price gaps between MCX and currency-adjusted LME levels tend to close over time.

Account for USD/INR movement: A weakening rupee can push MCX prices higher even when LME holds steady. A stronger rupee can limit domestic gains during an LME rally. Both sides of this equation are worth monitoring.

Monitor Indonesian policy announcements: Export restrictions, ore processing mandates, and mining quota changes tend to move nickel prices quickly. Government releases and industry updates from Indonesia are worth tracking regularly.

Plan for daily MTM settlements and margin calls: MCX marks positions to market every evening. Nickel can gap on sudden policy news or LME shifts. Sizing trades only around the minimum margin requirement may not leave enough buffer for volatility.

Consider multiple timeframes before entering: A trend visible on the daily chart may look different on the hourly view. Dhan's Custom Timeframes and India Timeframes can help you check for alignment across both before placing a trade.

Use a structured approach to position sizing: Dhan's Trade Plan tool lets you input your capital allocation, risk percentage, and reward target. It then calculates quantity, stop-loss level, and target price, reducing the need for manual calculation.

Exit before expiry if delivery isn't intended: Most retail traders don't plan to give or take physical delivery. Closing positions well ahead of the last trading day helps avoid compulsory delivery obligations.

Keep position size in line with your capital: Access to high leverage doesn't make large positions advisable. Defining a maximum risk per trade as a percentage of total capital is a more consistent way to manage exposure over time.