| The price will not be allowed to breach the floor and ceiling price of by more than 20 per cent each of the weighted average restricting excessive volatility. |
| It is a mechanism prevalent in an unorganised form in the trading community for a number of years. Since the contract life will be fixed for one-month, hedge traders are expected to benefit from this trading mechanism. |
| Commenting on the introduction of bandhani contract, Jignesh Shah, managing director, MCX, said, "MCX is determined to develop the commodities market in a much more systematic, controlled and logical manner. The launch of bandhani contract is an outcome of our exhaustive research and development efforts that we put in before bringing out any new contract. |
| This also further strengthens our understanding of the commodities market." |
| The exchange has put in place a number of innovations in the contract, to make it a suitable hedge tool. |
| The contract specifications include a trading unit of 10 tonne, with a base value of 100 kg. the maximum order size is 300 tonne, with a minimum price movement of Rs 1. |
| The daily price limits are set at 5 per cent while the initial margin is 7 per cent, with a delivery unit of 10 tonne. |
| This means that if the seller delivers any quantity between 9.75 tonne to 10.25 tonne,it will be construed as adequate discharge of his delivery obligation of 10 MT, though he will get the value for only for actually quantity delivered by him. |
| Delivery centre are within 50 kilometers of Jodhpur, Bikaner and Disa municipal limits. |
| In case of delivery at Disa or Bikaner, the transportation cost between the place of delivery to Jodhpur, as decided by the exchange, will be deducted from the selling price. |
| For delivery at Disa, deduction will also be made on account of sales tax adjustment between Gujarat and Rajasthan. |
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