India’s leading stock exchange, the National Stock Exchange will launch electricity futures trading from July 11, 2025, along with a special Liquidity Enhancement Scheme (LES) to encourage active participation. The Exchange announced the development through a circular on Saturday.
These contracts, available on a monthly basis, are aimed at helping market participants manage price risks in the power sector while deepening the commodity derivatives market.
In a media briefing held recently, the exchange talked about its plans to eventually launch quarterly and annual contracts as well.
The LES will run for six months and is designed to improve market liquidity and ensure efficient price discovery. As part of the scheme, NSE will appoint two market makers through a bidding process. The deadline to submit bids is July 2, 2025. Market Maker 1or MM1 will be responsible for quoting near-month contracts, while Market Maker 2 or MM2 will handle next-month and far-month contracts.
To qualify, interested trading members must meet certain criteria. This includes a net worth of at least Rs.5 crore, SEBI registration in the commodities segment, and relevant experience in the electricity value chain, such as power generation, trading or infrastructure.
They must also maintain minimum trading activity, with continuous buy and sell quotes during most of the trading hours.
The selected market makers will be eligible for monthly incentives, provided they meet all performance obligations. MM1 will receive ₹85 lakh a month, and MM2 will receive Rs.45 lakh.
However, these payouts will be reduced if the required presence levels are not met, and no incentive will be paid if the presence falls below 70 percent. Market makers exiting the scheme within two weeks of being appointed will face a penalty of Rs.5 lakh.
NSE Electricity Futures: Trading Details
Electricity futures contracts will be traded from Monday to Friday between 9:00 am and 11:30 or 11:55 pm, depending on daylight saving time adjustments. Contracts will be cash-settled and benchmarked to the market price published by the Power Exchange of India Ltd (PXIL).
At any point, futures contracts for the current and next three months will be available for trading.
Position limits have been capped at 30 lakh megawatt-hours (MWh) for trading members and 3 lakh MWh for individual clients.
The contracts will require a minimum margin of 10 percent or as determined by SPAN rules, and price movements will be subject to SEBI-mandated daily limits of 6 percent.
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