Twenty five students of second semester of LLIM along with two faculty members, Dr. Kinjal Shah and Dr. Suresh Suvarna went on a study tour to MCX, Andheri (east), Mumbai, on 13th June, 2023 to gain exposure on how commodity exchange works and also interaction with industry experts.
The Multi Commodity Exchange of India Limited (MCX), India’s first listed exchange, is a state-of-the-art, commodity derivatives exchange that facilitates online trading of commodity derivatives transactions, thereby providing a platform for price discovery and risk management. The Exchange, which started operations in November 2003, operates under the regulatory framework of Securities and Exchange Board of India (SEBI).
MCX offers trading in commodity derivative contracts across varied segments including bullion, industrial metals, energy and agricultural commodities, as also on indices constituted from these contracts. It is India’s first Exchange to introduce commodity options, and futures contracts on bullion, base metals and energy indices. The Exchange focuses on providing commodity value chain participants with neutral, secure and transparent trade mechanisms, and formulates quality parameters and trade regulations, in conformity with the regulatory framework.
Students in this study tour understood how retail investors can participate in the commodity market, the concepts of future and options, derivatives and importance of derivatives, difference between future and forward contract. They also learned about commodity vs equity- scope for diversification, commodity derivatives Ecosystem and about hedger, speculator and arbitragers.