The Multi Commodity Exchange (MCX), the country’s largest commodity exchange, will launch a mini contract on natural gas futures on Tuesday.

The contract would be cash settled based on the New York Mercantile Exchange.

Initially, two contracts expiring in April and May will be available for trading. Going ahead, a maximum of three months’ contracts will be available for trading, said MCX.

“Market participants are required to note that the position limits will be computed considering the open position in all variants of Natural Gas Futures contracts available for trading,” said the exchange.

Trading units will be of 250 MMBtu with a minimum order size of 60,000 MMBtu.

Quotation base value will be Rs/MMBtu and tick size of 10 paise.

The Exchange has implemented a narrower price slab of 4 per cent. Whenever the narrower slab is breached, the relaxation will be allowed up to 6 per cent without any cooling off period in the trade.

If the daily price limit of 6 per cent is also breached, then after a cooling off period of 15 minutes will be given before enhancing the price limit up to 9 per cent, it said.

In case price movement in international markets is more than the maximum daily price limit of 9 per cent, the same may be further relaxed in steps of 3 per cent, it added.

The open position for individual client will be 60 lakh MMBtu or 5 per cent of the market wide open position, whichever is higher, for all Natural Gas contracts combined together.

For a member collectively including all clients it will be six crore MMBtu or 20 per cent of the market-wide open position, whichever is higher, for all Natural Gas contracts combined together, said MCX.