The Multi Commodity Exchange of India (MCX) has launched monthly options contracts on its MCX iCOMDEX Bullion Index, marking a key expansion in its precious metals derivatives portfolio. The new contracts aim to enhance flexibility for traders, hedgers, and investors seeking exposure to gold and silver through a single instrument.
Key Features of the New Offering
- Underlying Index: MCX iCOMDEX Bullion Index, comprising MCX Gold and Silver Futures
- Contract Cycle: Monthly options with a three-month trading duration
- Minimum Contract Value: ₹5 lakh
- Market Share: MCX continues to hold nearly 98% of India’s commodity derivatives market by value
Margin Adjustments
In conjunction with the launch, MCX has revised margins on precious metals:
- Gold: Margin increased by 1%
- Silver: Margin raised by 1.5%
These adjustments aim to manage volatility and ensure healthy liquidity in bullion trading.
Performance Snapshot
The MCX Bullion Index has delivered a 12.40% annualized return over the past five years, reflecting the strong and steady performance of gold and silver in the Indian commodities market.
Benefits for Traders and Investors
The new monthly options are expected to:
- Broaden Market Access: Lower entry cost with ₹5 lakh minimum contract value
- Enable Diversified Exposure: Combined exposure to both gold and silver through a single index
- Enhance Strategic Flexibility: More frequent contract expiries allow fine-tuned hedging and trading strategies
Industry Outlook
The introduction of monthly bullion index options marks a significant step in deepening India’s commodities derivatives market. By offering a new hedging and investment avenue, MCX aims to attract both institutional and retail participation, while further strengthening its position as the leading exchange for precious metals trading in the country.
Disclaimer:
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