A rally in global oil prices, sparked by the US-Iran war, has triggered a rush of retail trading in India's crude derivatives, driving up futures and options volumes on domestic bourses. According to The Economic Times, average daily lots traded in crude oil futures on MCX jumped nearly four-fold to 125,662 in March from 32,183 in February - a 290% month-on-month increase. Trading activity eased somewhat in April, with average daily futures volumes moderating to 101,168 lots as of April 21 but remaining well above pre-war levels.
Similar surges were visible across mini crude contracts, as reported by The Economic Times. Average daily lots traded in crude oil mini futures rose 473% from February to 356,672 in March, before easing to 324,383 lots in April. In crude oil mini options, average daily options volumes jumped to 70,58,572 lots from 39,23,338 in March and 27,80,379 in February. Brokers said retail participation was largely concentrated in short-tenure positions, particularly in options, reflecting the speculative nature of the trades.
Oil prices have surged past $100 per barrel again after reports of gunfire attacks on three container ships in the Strait of Hormuz, as reported by The Economic Times. This comes amid ongoing tensions and a potential extension of a ceasefire with Iran. Trump ordered the US Navy to fire on any vessel laying mines in the strait, while adding Tehran wants a deal and talks are underway. US forces boarded a supertanker carrying Iranian oil in the Indian Ocean as the navy stepped up its blockade of the Islamic Republic's shipping. Tehran continues to keep Hormuz effectively closed, preventing the passage of hundreds of millions of barrels of oil and fuel as well as other commercial traffic. Giovanni Staunovo, an analyst at UBS Group AG, noted that as long as flows through the Strait remain restricted, the market keeps tightening and oil inventories keep falling, oil prices will remain supported.
Exchange margins on crude oil contracts climbed to nearly 48%, compared with the usual 20-25%, indicating that traders were willing to deploy higher capital to chase near-term price moves, according to The Economic Times. Mehul Koradia, chief strategy officer and director at Mirae Asset Sharekhan, noted that about 50-60% of volumes were higher than pre-war levels. Damani from Motilal Oswal Financial Services said exchange margins on oil contracts had risen as high as 70% at the peak of volatility, though they have eased to around 50% but still remain elevated compared with the typical 15–20% range seen during stable periods.
Ajit Mishra, SVP — Research at Religare Broking, cautioned that such phases often draw inexperienced traders chasing momentum, as reported by The Economic Times. He recalled that a similar rush into oil derivatives during the 2020 Covid-led price collapse eventually resulted in losses for many retail participants. The increase in participation happened even as trading conditions tightened, with average daily open interest in crude oil futures rising 14% from February to March, while options open interest declined 6% over the same period, reflecting the impact of rising premiums amid heightened volatility.
