The MCX Natural Gas Expiry Date 2023 marks the end of trading for Natural Gas contracts. As you may know, expiry dates play a vital role in the value of F&O contracts.
That’s why knowing the precise date of Natural Gas expiry can help you manage your positions more effectively. Let’s explore more about this significant date.
What Does Natural Gas Expiry Date Mean?
The expiry date for Natural Gas refers to the last date on which an F&O contract can be traded. After this date, the contract will become worthless and move into the settlement process.
As a trader or investor, you should be aware of the Natural Gas expiry date when trading Natural Gas futures on MCX.
It is crucial because if you still hold a position in the contract after the expiry date, it may lead to physical delivery of the commodity, which is impractical for most retail traders.
To avoid delivery complications, it is essential to either close out your positions before the expiry date or roll over your contract to a new expiration date if you wish to maintain your exposure to Natural Gas futures.
The act of rolling over refers to the process of shutting down a current position while concurrently initiating a new one that carries a later expiry date.
Natural Gas Expiry Date MCX
The lot size of Natural Gas is 1,250 mmBtu. That metric means Metric Million British Thermal Units. You can place a maximum order of 60,000 mmBtu, which is approximately 48 contracts of Natural Gas.
The first MCX Natural Gas contract for FY 23-24 began trading on March 14, 2023. The final contract for the fiscal year will be launched on September 27, 2023.
Check the table below for the complete MCX Natural Gas expiry dates 2023.
|Contract Month||Contract Launch Date||Expiry Date|
|April 2023||January 27, 2023||April 25, 2023|
|May 2023||February 24, 2023||May 25, 2023|
|June 2023||March 29, 2023||June 27, 2023|
|July 2023||April 26, 2023||July 26, 2023|
|August 2023||May 26, 2023||August 28, 2023|
|September 2023||June 28, 2023||September 26, 2023|
|October 2023||July 27, 2023||October 26, 2023|
|November 2023||August 29, 2023||November 27, 2023|
|December 2023||September 27, 2023||December 26, 2023|
Factors That Can Affect Natural Gas Prices at Expiry
Several factors can influence MCX Natural Gas prices at expiry. Some of the key factors include the following.
1. Supply and Demand
The balance between Natural Gas supply and demand significantly impacts prices, much like the entire list of commodities traded in India.
If you have a high demand for Natural Gas, there’s a high chance that the price will rise.
On the contrary, the price of Natural Gas will most likely fall if the supply outweighs demand.
This fundamental principle of supply and demand plays a crucial role in determining Natural Gas prices at expiry on MCX.
You should closely monitor this balance to anticipate potential price movements and manage your positions accordingly.
2. Economic Conditions
Economic conditions impact Natural Gas prices as well as exchange traded commodities. During economic growth, demand for Natural Gas increases, pushing prices higher.
Conversely, economic downturns lead to reduced demand This causes prices to drop.
Industrial and commercial activities heavily influence Natural Gas consumption, making economic factors a crucial determinant of price fluctuations at expiry on MCX.
3. Currency Fluctuations
Changes in currency exchange rates can directly affect Natural Gas prices on MCX.
Since Natural Gas is traded internationally, fluctuations in the value of different currencies can impact how much you can potentially make when trading Natural Gas contracts.
On MCX, Natural Gas is referenced from the New York Mercantile Exchange’s (NYMEX) Natural Gas front-month contract.
Thus, the settlement price will be the INR version of NYMEX’s Natural Gas contract based on the prevailing USD-INR pair conversion rate.
4. Storage Levels
When the Natural Gas supply is high, some of it gets stored in facilities. Later, when demand increases, they distribute the stored gas.
Before expiry, traders tend to check the storage levels. If there’s not enough stored gas, there’s the worry about a shortage, and prices might go up.
On the other hand, if there’s copious amounts of stored gas, there’s the worry about a surplus, and prices might go down. So, storage levels are known to affect Natural Gas prices at the end of the contract on MCX.
How to Trade Natural Gas Contracts?
Trading Natural Gas contracts involves several steps to follow. Here’s a simplified guide on how to trade Natural Gas contracts:
1. Learn, Learn, Learn
Before you start trading, educate yourself about the Natural Gas market, how contracts work, and the factors that can affect prices.
Your learnings will form the base of your trading strategy and overall approach to trading MCX Natural Gas futures or options.
2. Choose a Trading Platform or Broker
Select a reliable trading platform that offers access to Natural Gas contracts such as Dhan. You get access to everything you need for trading and managing the risk of Natural Gas contracts.
3. Open an Account
To begin trading Natural Gas contracts, you need to open a commodity trading account. Provide necessary documents and comply with verification procedures.
This account will give you access to the market and allow you to execute buy or sell orders for MCX Natural Gas contracts.
4. Familiarize with Contract Specifications
Before trading Natural Gas contracts, understand the contract details, such as contract size, expiry dates, and tick size.
|Market Hours||09.00 AM to 11.30 PM (11.55 PM*)|
|Trading Days||Monday to Friday|
|Lot Size||1250 mmBtu|
|Tick Size||10 paise (0.10 rupees)|
Knowing these specifications helps you choose the right contract and manage your trades effectively based on the contract’s terms and expiration timeline.
You must also know the exact MCX Margin for all Natural Gas trades before you take up a position.
5. Analyze the Market
Use technical indicators combined with fundamental analysis to assess the Natural Gas contract you’re targeting.
Most traders like to use a combination of indicators such as AVWAP, Bollinger Bands, MACD, and RSI while also taking into account factors like supply and demand, weather forecasts, geopolitical events, and storage levels.
6. Risk Management
Set a risk management plan to protect your capital. Determine your stop-loss levels and decide on a suitable position size based on your risk tolerance.
Risk management is a crucial aspect while trading to protect yourself from downside risk.
7. Place Trades
Execute your trade once you have analyzed the market and identified a trading opportunity. You can go long (buy) if you expect prices to rise or go short (sell) if you anticipate prices to fall.
Understanding the Natural Gas expiry date is crucial as you trade Natural Gas contracts on MCX. Being aware of the contract’s expiration allows you to manage your positions effectively and avoid potential delivery issues.
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