Definition
MCX Lot Size
The MCX lot size is the standardised minimum quantity of a commodity per futures contract, which determines the contract value and margin required to trade.
Each MCX commodity has a fixed lot size: for example, the big Gold contract is 1 kg, Silver is 30 kg, and Crude Oil is 100 barrels, with mini and micro variants for smaller traders. Lot size times price gives the contract's notional value.
Because commodities are leveraged, a trader posts only a margin (a fraction of notional) to control a full lot. Knowing the lot size is essential for position sizing and risk management on the MCX, since one tick movement is magnified across the whole lot.
Related terms
- Notional ValueNotional value is the full market value an F&O contract controls — the lot size times the underlying price.
- MCX (Multi Commodity Exchange)MCX is India's largest commodity derivatives exchange, where futures and options on metals, energy and bullion like gold, silver and crude oil are traded.
- Gold/Silver Futures (MCX)Gold and silver futures on MCX are exchange-traded contracts to buy or sell a fixed quantity of bullion at a future date, used by jewellers, investors and traders to hedge or speculate.
- Commodity HedgingCommodity hedging uses futures or options to lock in input or output prices, protecting producers and consumers from adverse moves in commodity prices.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.