Multi-commodity Exchange

1

• Introduction
• Trading at MCX
• Why MCX
• Demerits
• Differences
• Conclusion

2
Introduction

• A nationwide online multi commodity market
  place
• An independent and demutualised exchange
• Promoted by Financial Technologies Limited
• Formulated strategic alliances with leading
  
  commodity trade associations in India
• Poised to emerge as exchange of choice

3

• Introduction
• Trading at MCX
• Why MCX
• Demerits
• Differences
• Conclusion

4
Trading at MCX

• Trading days and hours
• Exchange members authorized users are entitled
  to trade
• Clearing the Trades on MCX
• Process of settlement and delivery
• Physical delivery in the warehouse
• Role of a Warehouse in Futures Market

5

• Introduction
• Trading at MCX
• Why MCX
• Demerits
• Differences
• Conclusion

6
Why MCX

• Leverage
• Commission costs
• Liquidity
• Ability to go short
• Reduced Risks

7
Why MCX

• Diversification
• Helps to Fix Price Easily
• No transportation charges
• Why invite risk by investing in a metal company
  when you can trade in the metal itself

8

• Introduction
• Trading at MCX
• Why MCX
• Demerits
• Differences
• Conclusion

9
Demerits

• Leverage
• Speed of trading
• Poor supervision
• Huge volatility uncertainty

10

• Introduction
• Trading at MCX
• Why MCX
• Demerits
• Differences
• Conclusion

11
Differences
Commodity derivatives Financial derivatives
Settled by actual deliveries Cash settled
Quantity and quality differences exist No such differences exist
Holding cost includes assaying, warehousing insurance costs Holding costs normally consists of only interest costs
Seasonal in nature Active throughout the year
Factors impacting demand and supply Import-export regulations Government intervention Factors impacting Global and local economic conditions Performance of the entity Taxation structure
12
Credits

• Sonam Shetty 51
• Rahul Chandalia 72
• Sanam Shah 108
• Bhavin Udani 115