The National Commodity & Derivatives Exchange Ltd (NCDEX) announced on May 20 the launch of weather derivative contracts (futures only), enabling traders to take exposure to weather, particularly the rainfall in Mumbai on which the contracts are actually based on, called RAINMUMBAI. Trading begins on May 29.

The underlying is deviation LPA (Long Period Average) i.e., how far the actual rainfall varies from the 30-year historical average (1991-2020), sourced from IMD (Indian Meteorological Department).

The tick size of these contracts will be 1 mm of rainfall deviation with a lot multiplier of ₹50 per mm. So, every 1 mm move translates to ₹50 profit/loss per lot.

For example, if you’re long and the cumulative rainfall runs 10 mm above the LPA, the contract rises by 10 units, translating into a profit of ₹500 (₹50 per mm multiplied by 10 unit move). Opposite holds for shorts.

The index debuts at a base value of 2,206 points, giving a contract value of ₹1,10,300 (2,206 multiplied by ₹50). As margin is fixed at 10-12 per cent, traders need ₹11,000-13,300 per lot to participate.

Trading hours are 10 am to 11:30/11:55 pm and all trades are cash settled. Max allowed order size will be 50 lots. On DPL (Daily Price Limit), the initial slab will be 6 per cent expandable by another 3 per cent, allowing a daily movement of 9 per cent. FSP (Final Settlement Price) will be the underlying spot value arrived on next calendar day of last trading day.

Published on May 23, 2026