Mumbai: The Multi Commodity Exchange of India (MCX) on Monday launched Silver 100 futures contracts, offering investors and small businesses a new way to trade silver with lower capital requirements.
The new contract allows trading in 100-gram units, making silver futures more accessible to retail investors, small jewellers and traders.
Smaller Investment Requirement
Until now, silver futures on MCX were available in larger contract sizes of 1 kg, 5 kg and 30 kg.
The introduction of the 100-gram contract significantly reduces the amount of money required to participate in silver trading, helping a wider range of investors enter the market.
With the launch, MCX's silver product portfolio now includes multiple futures and options contracts across different lot sizes.
Aimed at Retail Traders and Small Businesses
According to Praveena Rai, Managing Director and Chief Executive Officer of MCX, the new product has been introduced to help participants in the silver value chain manage price fluctuations more effectively.
She said the smaller contract size would enable jewellery businesses and other market participants to hedge price risks in quantities that better match their inventory needs.
MCX said the product was launched following feedback from market participants seeking lower entry barriers and more flexible trading options.
Physical Delivery Option Available
The exchange said traders holding the contract until expiry will have the option of taking physical delivery of silver.
The delivery process will follow standardised quality norms and transparent making charges, ensuring greater confidence and transparency for participants.
Clearing and settlement of the contracts will be handled by the Multi Commodity Exchange Clearing Corporation Limited (MCXCCL).
Focus on Domestic Refining Capacity
Along with the launch of the new contract, MCX issued a circular revising its good delivery standards for silver.
The exchange has also invited domestic refiners to apply for empanelment.
According to MCX, the initiative is aimed at strengthening India's silver refining ecosystem, encouraging greater recycling of silver and reducing dependence on imports over time.
Wider Access to Silver Market
Industry participants believe the new contract could increase participation in silver trading by making the commodity market more accessible to retail investors and small and medium enterprises.
The lower contract size is expected to improve liquidity and provide more flexibility for investors looking to gain exposure to silver prices without committing large amounts of capital.
