What is the Tender/Exercise period in MCX?
The tender period in MCX
(Multi Commodity Exchange) refers to the period before a commodity futures
contract expires. During this period, market participants holding open
positions in the contract have the option to either tender or exercise their
positions according to the terms specified in the contract.
Duration and Scope: The tender period typically spans
over a few days leading up to the contract's expiry date. During this time,
traders and investors can take action regarding their open positions, such as
closing them out or fulfilling delivery obligations as dictated by the terms of
the contract.
Contractual Obligations: Once the tender period concludes,
market participants are obligated to honour the terms of the contract as
specified.
Risk Management and Compliance: Market participants need
to carefully monitor the tender period and adhere to contractual obligations to
ensure compliance with exchange regulations and contractual terms. If you don't
do it, it may result in penalties or other repercussions as specified in the
exchange.
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