The Multi Commodity Exchange of India Ltd. on Monday launched monthly options contracts on the MCX iCOMDEX Bullion Index amid a frenzy in precious metals. The MCX BULLDEX constitutes the popular and liquid MCX Gold and Silver Futures contracts.
"The options contracts on this index will empower market participants with a versatile risk management tool, combining the benefits of diversified underlying assets with the flexibility of Options trading," the bourse said in a statement.
The bullion index, covering both gold and silver, offers a balanced exposure in the bullion segment to market participants – both investors and institutions alike, conveniently and cost-effectively, that would meet both their investment and hedging requirements, MCX said.
Monthly index contracts will have a maximum of three-month trading cycle — the near month, mid-month and far month. On expiry of the near-month contract, the new contracts are introduced for a three-month duration.
A derivative contract shall have a value of not less than Rs 5 lakh at the time of its introduction in the market, as per MCX.
Earlier this month, MCX raised the margins on both gold and silver contracts by 1% and 1.5%, respectively, to manage risks.
MCX has a market share of about 98% in terms of the value of commodity futures contracts traded in the financial year 2024-25.
The MCX Bullion Index has given an annualised return of 12.4% over five years, as per the latest available data from the exchange.
The company will announce its second-quarter earnings on Nov. 6.
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