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India’s energy market is set to get developed with MCX’s first-ever electricity futures launch on July 10.
Electricity futures are contracts that let buyers and sellers lock in power prices in advance to avoid future price shocks.
Worth noting: MCX will be launching this derivative product a day before NSE, which plans to go live with its own electricity futures on July 11.
What’s going on: MCX is expanding its commodity portfolio to meet the rising demand for power price risk tools. Electricity price swings are driven by fuel costs, weather shifts, peak loads, and festival seasons making a futures contract a timely addition.
The roll out will cover all 12 calendar months, with initial trading open for the current and next three months. Each contract is for 50 MWh, settled in cash based on average spot prices at IEX.
How it will work: Prices are quoted in ₹ per MWh, with a ₹1 tick size. Daily price limits will start at 6% and may extend to 9% to control volatility. Position limits and a minimum 10% margin aim to ensure a stable, well-regulated market.
Big theme: this is a game-changer for power generators, discoms, industries, and investors. From hedging price shocks to portfolio diversification, MCX’s new offering brings transparency and liquidity to a critical sector where demand and uncertainty are both growing fast.
