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What is MCX? September 02 2022Stock Market Education

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What is MCX Trading?

Commodity trading is on a major rise in the country. Multi Commodity Exchange (MCX) is India's leading commodity derivatives exchange with an impressive market share of about 96.4% in terms of the value of commodity futures contracts traded in the financial year 2022-23 April to June.

You will be surprised by reading the highest daily turnover of MCX since inception which is INR 119,941 crore. Yes, you read it right!

Even though millions of trades take place through the commodity exchange every day, still not many people are confident and aware of the commodity stock exchange. 

So, let us take you through the details of what is MCX.

What is MCX Market?

MCX is India’s first commodity derivative exchange that began its operations in 2003. Just like the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), MCX is governed by the Securities and Exchange Board of India (SEBI). MCX functions just like the other stock exchanges where you can buy or sell commodities like metals, energy, agriculture, etc.

Also read - 10 basic rules of commodity trading

Which Commodities are Traded in MCX?

There are four types of commodities traded in MCX:

· Agriculture based commodities like rice, pulses, grains, edible oils, cotton, spices

· Energy commodities like crude oil, coal, natural gas

· Base metal commodities like aluminum, nickel, steel, lead, zinc, tin, copper

· Precious metal commodities like gold, silver

The exchange has a total of 12 commodity groups. Apart from these groups, commodities like refined sugar, coffee and white sugar are also traded.

What is MCX Trading?

MCX provides traders a platform to buy and sell spot, future or option contracts of different commodities. To trade over the MCX platform you must have a demat account. Earlier the retail participants were not allowed by SEBI to directly participate in commodity markets. However, now retail participants can trade in commodities through the MCX using their regular demat accounts.

What are the MCX Trading hours?

MCX trading takes place between 9 am IST and 11.30 pm IST from Monday to Friday. However, between November and March, the end time is changed to 11.55 pm.

How Can You Trade in MCX Market?

There are two major ways through which you can trade in the commodity market:

·Futures Contract

It is an agreement between the buyer and seller where a buyer agrees to purchase a specific quantity of a commodity at a predetermined price and on a predetermined future date.

· Options Contract

It is a contract wherein the buyer has the right but not the obligation to purchase or sell the commodity at a fixed price.

What Factors Affect Commodity Market?

There are various factors that affect the prices of commodities on the MCX. These include demand and supply, geopolitical factors, weather conditions, economic and political conditions, cost of raw materials, government policies, and technological developments

How Can You Start Trading on MCX?

Since now you are aware of important details about MCX, we move on to listing down the details regarding how you can start trading on MCX.

· Select Stock broker

To begin trading on the MCX you need to select an MCX registered stockbroker. There are many brokers in the market providing different services. You may select a broker that fulfils all your requirements at the best possible price. You may choose Indira Securities to open a demat account for MCX trading as we are a customer-focused broking company.

· Fill the Application

After selecting the stockbroker, fill out the application form for trading in the commodity markets. Fill in the information correctly and submit the KYC documents that include income proof, identification proof, address proof, etc.

· Verification

The broker carries out in-person verification to check the legitimacy of the information submitted. Most brokers provide this service online as well. After the verification process is successful, your account is ready to trade in the MCX. You must make a margin payment to the broker before taking any trading position.


Bonus Tip: While trading in the commodity market you must learn to be patient and consider investing slowly. Try to diversify your investments as much as you can. Do not follow others blindly, pick trades as per your study and knowledge and if you are a beginner, do not hesitate to ask for help wherever it is required.

Wrapping it up

The MCX is one of the safest and most transparent commodity exchanges that adhere to the regulatory environment. One of the major benefits of trading in the commodity market is that you can purchase precious commodities like gold or silver in electronic form. You are no longer required to hold them physically. Commodity also diversifies your investment portfolio. Many investors use commodities trading for hedging their risk.

Therefore, you may consider investing in the commodity market through MCX using a demat account from Indira Securities. 

Blog Enquiry

Prevent Unauthorized Transactions in your demat and trading account --> Update your Mobile Number/Email id with your Depository Participant and Stock Broker. Receive alerts on your Registered Mobile for all debit and other important transactions in your demat/trading account directly from CDSL and Stock Exchanges on the same day.........issued in the interest of investors...

1. Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.

2. Update your Mobile Number & Email Id with your Stock Broker/ Depository Participant and receive OTP directly from Depository on your Email Id and/ or Mobile Number to create pledge.

3. Pay 20% upfront margin of the transaction value to trade in cash market segment.

4. Investors may please refer to the Exchange's Frequently Asked Questions (FAQs) issued by NSE vide. Circular No. NSE/INSP/45191 dated: July 31, 2020 and NSE/INSP/45534 and BSE vide Notice No. 20200731-7, dated: July 31, 2020 and 20200831- 45 dated: August 31, 2020 and dated: August 31, 2020 and other guidelines issued from time to time in this regard.

5. Check your Securities/ MF/ Bonds in the Consolidated Account Statement issued by NSDL/ CDSL every month.


  • 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
  • On an average, loss makers registered net trading loss close to ₹ 50,000.
  • Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
  • Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost
"As per the directives of CDSL and esteemed Exchanges, it has been made mandatory for every client to furnish their latest KYC details viz. Valid Mobile No., Email- Id & Income range on or before 31.05.2021 else your Account will be marked as Non Compliant and will be Freezed till the compliance of such requirement."
"No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorize your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."
"KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary."
Dear Investor if you wish to revoke your un-executed eDis mandate, please mail us with ISIN and quantity on by today EOD."

INDIRA SECURITIES PVT.LTD. (SEBI REG.NO.):NSE TMID: 12866, BSE TMID: 663, CDSL DPID: 17000 SEBI REG. NO.: INZ000188930, MCX TM ID: 56470, NCDEX TM ID: 01277, CDSL REG. NO.: IN-DP-90-2015, CIN : U67120MH1996PTC160201




Indrendu Joshi. Email: Call : 0731-4797275

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