MCX – Multi Commodity Exchange of India Ltd.

By Rohit 19 Comments 25 Nov 2018
MCX – Multi Commodity Exchange of India Ltd.

An Introduction

An independent commodity exchange based in India. It was established in 2003 and is based in Mumbai. Commodity trading is a trading in the commodity derivatives, that comprise a range of commodities from Bullion metals, Base metals, Energy & Agricultural commodities. It is India's largest commodity derivatives exchange where the clearance and settlements of the exchange happens and the turnover of the exchange for quarter ended December 2017 was 12.82 trillion rupees. MCX offers options trading in gold and futures trading in non-ferrous metals, bullion, energy, and a number of agricultural commodities.


Commodities Traded include

Metal : Aluminium, Aluminium Mini, Copper, Copper Mini, Lead, Lead Mini, Nickel, Nickel Mini, Zinc, Zinc Mini, Brass(futures).

Bullion : Gold, Gold Mini, Gold Guinea, Gold Petal, Gold Petal ( New Delhi), Gold Global, Silver, Silver Mini, Silver Micro, Silver 1000.

Agro Commodities : Cardamom, Cotton, Crude Palm Oil, Kapas, Mentha Oil, Castorseed, RBD Palmolien, Black Pepper.

Energy : Brent Crude Oil, Crude Oil, Crude Oil Mini, Natural Gas.


Commodity Market is affected by this factors

Trading, Clearing and Settlement :-

Trading, Clearing and Settlement

Trading is, when two or more traders negotiate to the exchange goods with cash at a particular date & price. There may two types of traders in the commodity market. One is the delivery based and other the non-delivery based (cash). Exchanges to clear the deal in the sense that both the negotiating clients are capable of relating to the contract or agreement and the settlement group take care of the resolution of goods opposite cash.



Demand & Supply :-

Demand & Supply

Demand & supply are the basic factors that influence the movement of commodity product prices. The rule of the demand & supply is similar to equity as well as the commodity markets. However, demand & supply of all types of commodities vary during diverse time periods depending upon it’s seasons, domestic & global conditions and different other major factors changing its characteristics.



Global and Domestic Economy :-

Global and Domestic Economy

Economic scenario considerably affects the prices of commodities. Demand & supply of any commodity have a direct relationship with the financial condition in the any state. Depending upon the behaviour of the commodity global & domestic economic situations affects the commodity product prices. For e.g.; Steel prices, highly depend on worldwide economic factors as this is an internationally and the massively used commodity. However, as far as a commodity like Kappas (cotton) is concerned international factors affect less, when compared to nation factors.



Economic Growth :-

Economic growth

The economic growth of the world as well as the country’s economy is a significant fundamental that will influence the demand & supply positions in a country. If the state is growing at a very fast rate the consumption, height will also be at a superior rate. This will boost the demand for single hand, but supply may not boost at the similar rate as it takes a moment in time to set up new corporation and increase the production. This drives the commodity prices of every major commodities.



Extraordinary Events :-

There may be assured extraordinary factors, that do not happen very frequently. Natural calamities, wars, depression, etc. are such as events that affect the commodity prices in a theatrical way.

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