Multi Commodity Exchange (MCX) has been in the news recently after hitting an all-time high turnover of Rs 1,51,866 crore across products. This is a significant milestone for the exchange and a testament to its growing popularity among traders and investors.
According to Rishi Nathany, chief business office (CBO) of MCX, the options product contributed Rs 1,16,000 crore and gold contributed around Rs 8,000 crore to the total turnover. This shows that traders are increasingly turning to derivatives trading as a way to manage their risk and maximise their returns.
The rise in turnover can also be attributed to recent regulatory changes that have allowed MCX to re-launch mini contracts in zinc, lead, silver, aluminium, gold, and natural gas. The Securities and Exchange Board of India (SEBI) had discontinued multiple contracts in January 2020, but the recent re-launch of mini contracts has helped attract more traders to the exchange.
Nathany while speaking to CNBC-TV18 said that the re-launch of mini contracts in natural gas has been particularly successful. He also noted that apart from natural gas, the other mini contracts are re-launches and have been well received by traders.
In addition to the re-launch of mini contracts, SEBI has also recently allowed foreign portfolio investors (FPIs) to participate in cash-settled non-agri commodities and commodity derivatives and indices. This has opened up new opportunities for traders and investors, and there is nothing stopping FPIs from starting trading now.
However, despite the positive news, there are still challenges ahead. Geopolitics and the uncertainty that surrounds it, is the new normal, said Nathani. This means that traders and investors need to be aware of the risks and take appropriate measures to manage them.