MCX launches Silver 100 futures: How investors can trade the metal with lower capital

The Multi Commodity Exchange of India on Monday (June 1) launched Silver 100 futures contracts, expanding its silver derivatives offerings and giving retail investors and small jewellers access to the commodity in much smaller tradable units.

The new contract allows trading in 100-gram denominations, significantly lowering entry barriers compared to existing silver futures contracts of 1 kg, 5 kg and 30 kg.

With this addition, MCX’s silver portfolio now includes multiple futures and options instruments across different lot sizes.
Clearing and settlement will be managed by the Multi Commodity Exchange Clearing Corporation Limited MCX Clearing Corporation Limited.
According to Praveena Rai, Managing Director and CEO, MCX, the new product is designed to help participants in the silver value chain manage price volatility more efficiently.

She said smaller contract sizes would allow jewellery businesses to hedge risks or take delivery in quantities better aligned with their inventory requirements.

The exchange said the product was introduced based on feedback from market participants and is aimed at reducing capital requirements for small and medium enterprises as well as retail traders.

At contract expiry, participants will have the option of physical delivery with standardised quality norms and transparent making charges.

Alongside the launch, MCX also issued a circular revising its good delivery standards for silver, and invited domestic refiners to seek empanelment. The move is aimed at strengthening domestic refining capacity and reducing dependence on imported silver through improved recycling participation.

–With PTI inputs