BSE Brings Negative Price Feature For Commodity Derivatives Segment
The Bombay Stock Exchange logo. (Photographer: Dhiraj Singh/Bloomberg)

BSE Brings Negative Price Feature For Commodity Derivatives Segment


Bombay Stock Exchange will make available the negative price level feature at its trading system for commodity derivatives segment, the leading exchange said on Tuesday.

This comes following a recent global development in the crude oil derivatives market where trading of derivatives contracts happened at negative prices owing to various underlying factors.

In a circular, BSE has informed its trading members of commodity derivative segment that the exchange's trading system has been modified to accept orders and execute trades at negative prices.

Also read: Oil Plunges Toward $10 After Sudden Index Shift Spurs Fire Sale

To facilitate testing of this feature in the simulation (test) environment, the exchange said that trading price range of Brent Crude Oil futures contracts will be suitably updated to accept orders at negative price levels and execute trades.

The new feature will be made available to members to test from Monday, May 4, 2020, onwards, it added.

According to the exchange, trading members and front-end trading application vendors will be able to place test orders and trade in these contracts at those price levels.

This will help members in checking the readiness of their internal systems and make suitable modifications, if any required, the exchange noted.

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