UCX has a robust risk-management system to contain the risk arising out of transactions entered into by the members in various contracts either on their own account or on behalf of their clients.

Margin requirements for a Member for each contract shall be as under:
  • For client positions – shall be netted at the level of individual client and grossed across all clients, at the Member level, without any set-offs between clients.
  • For proprietary positions - shall be netted at Member level without any set-offs between client and proprietary positions.

UCX levies following types of margins
Initial Margin - Initial Margin requirement is based on a worst-case loss scenario of portfolio at client level to cover the largest loss that can be encountered on 99% of the days (99% Value at Risk), subject to a minimum Base Margin defined by FMC for the respective commodity.

Special Margins - In case of additional volatility, a special margin at such other percentage as deemed fit by the Regulator/Exchange.

Additional Margins - In addition to above Exchange may levy additional margins on both long and short side as deemed fit.

Pre-expiry Margin - During last 5 days prior to expiry on incremental basis.
Delivery Margins - In case of positions materializing into physical delivery, delivery margins shall be levied as prescribed in contract specifications.

Margin on Calendar Spread Position - A client having buy and sell positions in different contracts / expiry of same commodity. E.g. +5 Lot in Gold July Contract and -5 Lot in Gold October contract is a spread position. Exchange gives the margin benefit as the positions of the client are hedged and hence Exchange passes this benefit to its clients/ members. This benefit shall be withdrawn from the day of contract enters into pre-expiry period.