Commodity Trading on MCX: A Beginner’s Primer
What trades on the exchange, how contract sizes work and why the evening session exists.
Urja Investment DeskInvestor education
The Multi Commodity Exchange (MCX) is where commodity futures and options trade in India. You are trading contracts on the price of a commodity — you are not buying barrels or bars.
What trades
- Bullion: gold and silver, in several contract sizes.
- Energy: crude oil and natural gas.
- Base metals: copper, zinc, aluminium, lead and others.
- Select agricultural commodities.
Contract sizes matter
The same commodity is offered in different sizes so that position size can match capital. Gold, for instance, trades in a standard contract and in smaller “mini” and “petal” variants. Check the contract specification on the exchange before trading — lot size, tick size, expiry and delivery terms differ.
Why there is an evening session
Commodity prices are set globally. MCX trades late into the evening so that Indian participants can respond to the European and US sessions and to data such as inventory reports. Moves after Indian equity hours are common.
Who uses commodity derivatives
- Hedgers — jewellers, manufacturers, importers — locking in a price for something they will buy or sell.
- Traders taking a view on price.
Delivery
Some contracts are compulsory-delivery. If you do not intend to give or take delivery, close the position before the delivery period begins. The exchange publishes the dates for every contract.
This article is for investor education. It is not investment, tax or legal advice and is not a recommendation to buy or sell any security. Investments in the securities market are subject to market risks; read all related documents carefully before investing.