Crude bears could wake up to rude shock Friday

Mumbai: Clients short crude oil futures on MCX could face a big loss at opening Friday with US light sweet oil trading up 22% at $25.36 a barrel around 22:30 IST Thursday.

If prices close at these levels , shorts will take a hit but brokers won’t have any problem as margins collected from clients are adequate to meet the exigency , said Nitin Kedia of Kedia Capital .

MCX was closed for the Ram Navami holiday Thursday when comments by Trump on Saudi and Russia arriving a deal to cut oil output caused WTI to surge as much as 35% earlier in the day. In addition to the holiday , MCX along with other bourses has pruned commodity segment trade timings to 5 pm from 11:30 pm daily to amid a nationwide lockdown through April 14.


The initial margin to trade crude on MCX was around 42% Wednesday which is enough to handle excessive intraday movement . A contract equals 100 barrels . The April 20 expiry crude contract last traded at Rs 1619 a barrel Wednesday . The initial margin at 42% means a client has to put up a minimum of Rs 68000 for each trade .

Data on MCX for April 1 shows that the top 10 shorts hold significantly higher positions than the top 10 longs . For eg, the No 1 long client holds 2860 contracts against the No 1 short client with 4200 contracts .