uTrade AlgosMCX (Multi-Commodity Exchange) is India’s largest commodity exchange, where various commodities like metals, energy, and agricultural products are traded. It allows investors to buy and sell commodity derivatives such as futures contracts, where the price of a commodity is agreed upon today for delivery at a future date.
How MCX Trading Works:
Opening an Account: To start trading on MCX, you need to open an account with a registered broker who provides access to the exchange. You can trade in MCX using a broker platform like Share India. Just open a free Demat account and use our trading platform to start MCX trading using Share India.
Choosing Commodities: You can select from a wide range of commodities to trade, including precious metals (like gold and silver), base metals (like copper and aluminium), energy commodities (like crude oil and natural gas), and agricultural products (like cotton).
Futures Contracts: The core of MCX trading involves buying or selling futures contracts. A futures contract is a financial agreement where two parties agree to buy or sell a specific commodity at a predetermined price at a future date. These contracts allow traders to lock in prices today, regardless of how the market price moves over time.
- Why Futures Contracts? Futures contracts are used because they provide both opportunities for speculation and risk management. For example, a trader might buy a gold futures contract if they believe the price of gold will rise. Similarly, businesses that rely on commodities (e.g., oil refiners) can use futures contracts to lock in prices and protect themselves from price fluctuations.
Leverage: MCX trading also allows leverage, meaning you only need to deposit a fraction of the total contract value (called margin) to take a position. This gives you the ability to control a larger quantity of the commodity with a smaller initial investment.
Trading Hours: MCX operates in two market sessions.
- Morning session: 10:00 AM to 5:00 PM
- Evening session: 05:00 PM to 11:30/11:55 PM
- Internationally linked agricultural items are traded between 5:00 PM to 9:00/9:30 PM.
Settlement: When the futures contract reaches its expiration, the contract is settled either by physical delivery of the commodity to your Demat account or through a cash settlement, depending on the type of contract.
To get started with MCX trading with Share India, open your Demat account here.