MCX jumps 7.96% to Rs 1069.05 after the company successfully settled the payin and payout despite brokers having to bear huge losses on account of negative pricing of the near-term contract.
Shares of MCX fell 13.73% in two trading sessions to Rs 990.20 on Wednesday (22 April) from its previous closing high of Rs 1147.8 on 20 April 2020 after facing flak for fixing the April month crude oil contract price negatively.MCX's crude contract settlement price at expiry is derived from the nearest expiry contract at the US-based Nymex (New York Mercantile Exchange). Futures contract for US crude prices crashed and turned negative for the first time in history on Monday (20 April) amid a demand collapse due to the coronavirus pandemic. On 20 April, West Texas Intermediate (WTI) settled at -$37.63 a barrel, after going as low as -$40.32. This negative price has never happened before for an oil futures contract.
MCX on Tuesday (21 April) fixed Rs (-) 2,884 a barrel as its final due date rate for the April month crude oil contract that expired on Monday (20 April). Brokers who were left holding the buy position for April month crude oil futures will have to bear the full loss.
MCX said Wednesday's (22 April) pay-in and payout, including the settlement of 20 April 2020 crude oil contract, has been completed and a payout of Rs 242.32 crore has been made to clearing members of the Multi Commodity Exchange of India Limited (MCXCCL).
Meanwhile, the media reported that three brokerage firms -- Motilal Oswal Financial Services, Religare Securities and PCS Securities -- on Wednesday (22 April) moved Bombay High Court against MCX's decision to price the April contract negatively.
MCX is engaged in facilitating trading, and clearing and settlement of commodity derivatives. It operates as a commodity futures exchange.
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