The Multi Commodity Exchange Clearing Corporation Limited (MCXCCL), on October 6, 2026, has introduced an Alternate Risk Management Framework (ARMF) for Crude Oil and Natural Gas contracts that may be exposed to near-zero or negative prices, applicable for November 2026.
The ARMF may be triggered where commodity/index prices fall by more than 50% within 20 trading days, or where other specified circumstances indicate the likelihood of near-zero or negative prices, including measures introduced by international exchanges or the introduction of near-zero/negative strike price options. MCXCCL, in consultation with MCX, will formally decide whether to activate the framework.
For November 2026, the threshold prices for triggering the ARMF have been fixed at ₹1,851 for Crude Oil and Crude Oil Mini and ₹158.50 for Natural Gas and Natural Gas Mini. If triggered, prescribed absolute minimum initial margins will apply, with the applicable margin being the higher of the percentage-based minimum margin and the specified absolute minimum. The spread margin benefit will also be completely withdrawn.
The framework further provides for ELM based on specified threshold prices, use of the Bachelier Model based on price volatility for options pricing, and additional margins based on the extent of price decline. An additional margin of 50% of MTM will apply for a 50%–75% fall, 100% of MTM for a 75%–90% fall, and 125% of MTM for a fall beyond 90%. MCXCCL may also impose further margins based on market conditions.
The provisions of the circular shall be applicable for the month of November 2026, and members have been advised to take note of the same.
[Circular No. MCX/MCXCCL/563/2026]
