MCX Meaning – How to buy and sell commodities on MCX (Beginners Guide)

What is MCX Trading? How to Invest in MCX?

When you hear the word Stock Market, you instantly start thinking about stocks, nifty, sensex, etc. and that’s it.

BUT, there’s more to markets than stocks, MCX (Multi Commodity Exchange) helps you trade in daily usage Commodities like Cotton, Gold, Silver, etc.

Confused? 

Read the simple article below.

Content: 

What is a Commodity?

Before we jump into learning What is MCX in Stock Market, it’s important to know What a Commodity is. In simple terms, a commodity is a product that is used in your daily life like Cotton, Black Pepper or a commodity can also be something valuable like Gold, Silver, etc.

MCX Meaning

MCX stands for Multi Commodity Exchange, it is an online platform for commodity trading in India. Just like how you invest in stocks of various companies, you can also invest in commodities like Gold, Silver, Cotton, Black Pepper, etc. via MCX. 

What is MCX Trading? Or How to buy and sell commodities on MCX?

MCX trading refers to buying and selling of commodities. You can buy and sell commodities on MCX via derivatives contract (Futures and Options). 

MCX offers trading across different commodity segments like: 

  • Bullion: Commodity Derivatives in Gold & Silver.
  • Industrial Metals: Commodity Derivatives in Aluminium, Copper, Nickel, etc.
  • Energy: Commodity Derivatives in Crude Oil and Natural Gas.
  • Agricultural Commodities: Commodity Derivatives in Cotton, Cardamom, Black Pepper, etc.

Apart from this, you can also trade in commodity indices. MCX offers three main indices:

  • MCX BULLDEX: MCX BULLDEX is the sectoral index that tracks the performance of liquid Gold & Silver Futures traded on MCX.  

Check out how much each commodity contributes to the movement of BULLDEX:

Commodity

Weightage

Gold

70.52%

Silver

29.48%

  • MCX METLDEX: MCX METLDEX is the sectoral index that tracks the performance of Liquid Base Metal Futures (Aluminium, Copper, Lead, Nickel and Zinc) traded on MCX. As the index tracks essential industrial metals, it acts as the indicator for overall performance of the metals manufacturing industry.

Commodity

Weightage

Aluminium

9.48%

Copper

29.81%

Lead

12.88%

Nickel

14.77%

Zinc

33.06%

  • MCX iCOMDEX: iCOMDEX is a broader index that tracks the performance of 11 most liquid futures commodities. Check out how much each commodity contributes to the movement of iCOMDEX:

Commodity

Weightage

Crude Palm

1.34%

Cotton bales

2.09%

Crude Oil

41.22%

Natural Gas

5.47%

Aluminium

2.14%

Copper

6.72%

Lead

2.91%

Nickel

3.33%

Zinc

7.46%

Gold

19.26%

Silver

8.05%

MCX Timing

Trading time for Bullion, Industrial Metal, and Energy Commodities is 9.00 am to 11.30 pm from Monday to Friday.

For Agri commodities, the timing is 10.00 am to 5.00 pm from Monday to Friday.

How to invest in MCX?

Did you know?? MCX is the only exchange that’s listed in the stock market and you can buy and sell the shares of the exchange “MCX” on NSE or BSE

On the other hand, if you want to invest in the “commodities like Gold, Cotton, Crude Oil listed on MCX”: You can do it via Futures and Options contracts. Not just that, you can also invest in the indices that represent the overall performance of the listed commodities on MCX. 

MCX History

MCX was established in 2002, with almost 2 decades in the business and with remarkable technological advances, it has had an incredible journey throughout. Here are some of the key historical milestones of MCX:

Year

Milestone

2003

Operations commenced on 10th November. 

2006

Product licencing with CME Group. (World’s leading and most diverse derivatives marketplace)

2012

MCX shares were listed on NSE & BSE, making it the first listed exchange in India.

2017

Launched first-ever Gold Options contract in India.

2018

Launched Options contract in Crude Oil, Silver, Copper & Zinc.

2019

Launched the MCX iCOMDEX commodity index series, comprising a composite index, two sectoral indices and four single commodity indices in December.

Quick Summary

  • Commodity is a product that is used in day to day life.
  • MCX ( multi commodity exchange) helps you trade in daily usage commodities like cotton ,gold ,silver etc.
  • MCX is an online platform for commodity trading in India it is just like investing in stocks but here it’s for commodities.
  • MCX trading refers to buying and selling of commodity contracts.(Futures and Options). 
  • Commodity Contracts like futures & options can be traded in different segments like Bullion, Industrial Metals, Energy and Agricultural Goods. 
  • You can also trade in commodity indices. MCX offers three leading indices: 
    • iCOMDEX
    • BULLDEX & 
    • METLDEX.
  • Precious Metal, Base Metal, and Energy Commodities time: 9.00 am to 11.30 pm from Monday to Friday.
  • Agri Commodities time: 10.00 am to 5.00 pm from Monday to Friday.  

FAQ(Frequently Asked Questions)

1. Is MCX Trading Profitable?

Yes, it is profitable. MCX gives you the opportunity to trade in real world commodities like, rice, oil, gold, silver, etc. The profits are made with the fluctuations in the price of the commodities.

2. Which is Better Stock or Commodity?

This is a very subjective thing to answer. Commodities are very volatile in nature compared to equity. Therefore higher volatility attracts higher profits, deeper losses and more risk. But again, it depends on trader to trader. Some look for higher volatility.

3. How Commodities are Traded in India?

Online Trading in Commodities are done through Commodity exchanges MCX, ICEX, NCDEX. They are online platform for commodity trading in India. Just like how you invest in stocks of various companies, you can also invest in commodities like Gold, Silver, Cotton, Black Pepper, etc.

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About Author

Vinayak Hagargi

Vinayak is Impressively Enthusiastic about Financial Markets, Research & Curating Layman-Friendly Content. He has been Successfully Contributing to the Financial Markets for over 2 years & has written over 100+ articles. He aims to continue sharing his knowledge to empower newbies with Relatable, & Easy to Understand Content.

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