Multi Commodity Exchange of India on August 24 launched the country’s first bullion index Bulldex and traded 2,650 lots worth Rs 215.10 crore in its first trading session. The index offers traders and investors a complete bouquet of products in gold and silver derivatives.
MCX so far had 1-gm gold petal, 8-gm gold guinea, 100-gm gold mini and 1-kg gold contracts, the exchange said in a statement.
Similarly, a silver mini and silver 30-kg contracts are also key volume grossers for the bourse.
The index will have around 70:30 weightage on gold and silver – the buyer of Bulldex will have a simultaneous exposure of 70 percent gold and 30 percent silver in a single product – making it the most suitable product for retail traders and investors in MSME segment to hedge price risks, MCX said.
“It offers retail investors an opportunity to invest in the bullion sector as a whole without the need to analyse the gold or the silver market separately… it is convenient as the contract is settled in cash,” MCX chairman Saurabh Chandra said.
Unlike existing products, Bulldex is a cash-settled product, having a huge potential from institutional investors like mutual funds, portfolio managers, corporate in the gem and jewellery sector, among others.
“The index is expected to incentivise the institutional participants to create a variety of unique trading and arbitrage strategies by utilising underlined commodity contract variants and the index futures product.
“It can also be used by institutional investors including fund managers to benchmark the outcome of their investment decisions in the bullion sector. It is an easy to replicate index with minimum tracking errors and passive index-based investment strategies,” Chandra added.