Kamal Ghorui
Trading volumes in crude oil futures on the Multi Commodity Exchange of India rose dramatically in March. Average daily traded lots climbed to 125,662, nearly four times higher than February’s 32,183 lots, marking a month-on-month jump of about 290 per cent, according to data from Mirae Asset Sharekhan quoted by ET.
Although activity cooled somewhat in April, futures volumes remained significantly elevated. As of April 21, average daily trading stood at 101,168 lots, still far above the levels seen before the conflict.
The surge was equally evident in mini crude contracts. Average daily volumes in crude oil mini futures soared 473 per cent between February and March, reaching 356,672 lots. In April, this figure moderated slightly to 324,383 lots, but continued to remain robust.
Options trading in mini crude contracts also recorded a sharp upswing. Average daily volumes increased to 70,58,572 lots in April, up from 39,23,338 lots in March and 27,80,379 lots in February.
Brokerages noted that much of this increased retail activity was concentrated in short-duration trades, especially in the options segment, highlighting the speculative nature of investor participation.
According to Mehul Koradia, Chief Strategy Officer and Director at Mirae Asset Sharekhan, retail involvement in crude oil contracts has risen sharply, with overall trading volumes running 50 to 60 per cent higher than pre-conflict levels.
This heightened participation came despite a significant tightening in trading conditions. Margin requirements on crude oil contracts rose to nearly 48 per cent, compared with the usual 20 to 25 per cent range. Even so, traders continued to commit larger amounts of capital in an attempt to benefit from short-term price swings.
Open interest data reflected this trend. Average daily open interest in crude oil futures increased 14 per cent from February to March. In contrast, options open interest declined 6 per cent over the same period, likely due to rising option premiums amid heightened market volatility.
The spike in derivatives activity coincided with an extraordinary rally in international oil prices. Brent crude futures surged more than 63 per cent in March, the steepest monthly gain ever recorded, with prices touching a high of $119.5 per barrel during the month.
