MCX TO LAUNCH BULLDEX – INDIA’S FIRST BULLION INDEX

MCX TO LAUNCH BULLDEX – INDIA’S FIRST BULLION INDEX

Multi Commodity Exchange of India (MCX) will disclose India’s first bullion index called Bulldex on 24th August 2020.


This Bulldex will be more beneficial for the hedgers and institutional participants, as it is going to be a cash-settled futures contract. This will be an added advantage for the exchange as the number of serious participants will increase in the bullion features, which in result will be adding depth to the commodity derivatives market.


It will have a market lot size of 5o, with gold and silver underlying. It will be a cash-settled future contract, unlike gold and silver contracts. MCX iCOMDEX Bullion index future contracts will expire on September 2020, October 2020, and November 2020 and the trading will start from August 24, 2020.

Bulldex, a bullion index is said to be the sixth product to be launched by MCX. In the bullion division, the Multi Commodity Exchange of India (MCX) already offers 1 kg gold, 100 gm gold mini, 8 gm gold guinea, and 1 gm gold petal contract.

There has been a significant increase in the price of gold and silver since mid-March due to market volatility. The exchange has also seen an increase in trade volume during this period. The exchange is expecting huge participation from traders when ‘Bulldex’ will launch.
 


 

In recent times, the exchange has launched an option in a 100-gram goldmine contract that MCX is considering to include in the index.
 

In the month of July, the Multi Commodity Exchange of India (MCX) tested the bullion index future during a mock trading exercise. The MCX is also planning to launch indices on base metals and energy in a phasic manner after getting the approval from a regulatory authority.
 

MCXs Recent Launch 

On May 25, the Multi Commodity Exchange of India (MCX), has launched an index for agricultural commodities called, Agridex. This is the first index on agricultural products that comprise a basket of ten farm commodities. This index will help the market players with year-round price discovery. 
 

Contract Specifications of MCX iCOMDEX Bullion Index Futures
 

The following are the few contract specifications of MCX iCOMDEX Bullion Index Futures:

1 Symbol MCXBULLDEX
2 Description MCXBULLDEXMMMYY
3 Underlying Index MCX iCOMDEX BULLION
4 Contract Listing Contracts are available as per the Contract Launch Calendar
5 Contract Start Day 20th day of contract launch month. If 20th day is a holiday  then the following working day
6 Last Trading Day One business day prior to the start of the rollover period in the underlying constituent/(s) index. In case, if there is no rollover during any calendar month, the contract will expire on the 25th day of the month. If 25th day is a holiday, then preceding working day
7 Settlement Mechanism The contract would be settled in cash
8 Trading Period Monday to Friday


For the full contract specification and further details regarding the BULLDEX, kindly click on the following link –

https://www.mcxindia.com/docs/default-source/circulars/english/2020/august/circular-589-2020.pdf?sfvrsn=7e349990_0
 

Edited by Minu Mishra

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