The Futures Market is primarily intended for Hedging and Speculation. Contracts in Futures Market results mostly in Cash Settlement and do not frequently result in delivery. The Clearing House arranges guarantee of trades executed on the exchange i.e. contracts that must be closed out during settlement date. Delivery contracts will be delivered and settled through the certified receipts. MEXM is having different delivery months in the Products and as separate contracts for each commodity being traded at MEXM. All contracts are settled on daily basis at the daily settlement price till the final settlement of commodity on the expiry date.

Futures market consists of various book types wherein orders are segregated as Regular lot orders, Special Term orders, and Negotiated Trade Entries and Stop Loss orders depending on their order attributes. All orders have to be of regular lot size or multiples thereof.

As the quotes are provided by the market-makers and clearing members cum market-makers, the base for order-matching market mechanism is possible in this model. In addition to bid-ask quotes displayed in the market-depth (list of best bid and ask in ascending and descending orders respectively), the contingent orders, i.e., stop and limit orders, placed by the market participants or traders provides greater liquidity and transparency in the market place. Beyond the available quotes offered by the market-makers/clearing members cum market- makers, the buy and sell orders or the traders are reciprocated or matched with opposite available positions to execute the orders. Further, to ensure execution of trader or order positions, the central clearing house, i.e., a clearing house of the exchange, is always open to take the opposite positions to guarantee the trade or orders placed by the traders.

Participants of the Market:

Clearing member:

• Registered institution with financial requirement prescribed by exchange.
• Dual Role as extended agency of Clearing corporation of Clearing & Settlement(C&S) and Market Making as a Market Maker(MM)
• Clearing & Settlement Role
  • Can introduce brokers, and responsible for administrative works (provide margin/ commission leverage, creating client profile, Broker and Sub-broker creation, margin call, fund transfer, offline support etc).
• Market Making Role
  • Provide frequent bid and ask quotes simultaneously with quantity within the parameter set by the exchange.

Market Maker

• Registered institution or a sole proprietorship
• Plays only the role of Market Making
• Not authorized to introduce clients

Introductory Broker Member

• Plays a role to introduce sub-brokers /clients or can trade on their own account.
• Providing advisory services to clients, training and customer support etc.