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An example of market microstructure: the Muzaffarnagar market for jaggery futures

Product design I Trades only futures. I Four contracts in a year. I Typically: 15th December to 15th July, 15th November to 15th January, 15th December to 15th March, 15th February to 15th July. The exchange has to get permission from the regulator to start each contract. I Contracts are physically settled on one specific underlying grade of jaggery. The unit of delivery for each contract is 4 tonnes. I The price of the underlying is difficult to ascertain. The quantity of jaggery available in the market is difficult to determine. As a result, there is a deep fear of short–squeezes in the market

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