MCX (Multi Commodity Exchange of India Limited) is the commodity derivative exchange platform that lets you trade in commodities like gold, rubber, oilseeds, spices, metals, etc. The platform was launched in 2003 in Mumbai and is the largest commodity exchange platform in India today. It is an online platform, operational as a marketplace to facilitate trade between buyers and sellers.
The most popular commodity traded via MCX is mined goods like gold. MCX’s gold price fluctuates more than other commodities available on its platform. But before starting your trading gold journey through MCX, you must know all the basics of how trading is done via MCX in India.
What is MCX Trading in India?
The MCX trading process takes place among many buyers and sellers from around the globe trading on different types of commodities. Mostly, the traders deal in the future market dealings of commodities. Such dealings help them predict the future price of the goods listed on the platform. The platform also enables cash settlements and delivery of goods wherever needed.
Reasons to Opt for Gold Trading via MCX
Now that you are well aware of the MCX platform for trading, here are some reasons why you must begin trading with gold futures:
- The ever-rising demand for gold will never go down. The Indian trading market will always be dealing in gold, be it for selling it for weddings or any auspicious occasions.
- The Central Banks from around the world own trillions in gold futures, making it easily accessible for trading on MCX.
- Gold is the treasure that helps tackle the downturns of the economy or any geopolitical tensions.
How to Start Trading via Gold MCX?
If you are looking to trade in gold via MCX, then it’s essential to understand the process in detail to avoid any failures. Here are the steps any first-time investor can follow to enjoy the beneficial process of gold trading in MCX-
- Select a broker– The first step in gold trading is to find a reliable and competent broker. One must look for brokerage firms registered with MCX and choose one that matches their aspirations and ideals in trading.
- Registration– You must register with MCX to begin your gold trading. Fill out the application form with relevant details and submit copies of the required documents along with the application.
- Check the minimum amount- Every commodity listed on MCX has a minimum investment amount that must be invested to start gold trading. The minimum amount to be invested in MCX Gold Mini or any other gold variant is around INR 5000.
- Money transfer– This step is crucial to complete your minimum investment. The money must be transferred to the broker via demand draft, net banking or cheque. Once done, you can log in to your account and participate in futuristic trading via MCX.
Documents Required to Begin MCX Gold Trading
Some relevant documents must be submitted to open your MCX account and begin the gold MCX trading. These are:
- Bank account details
- PAN card details
- Residence proof (Passport, DL, Voter ID, etc.)
- Passport-size photographs
Things to Keep in Mind While Trading MCX Gold
As a first-time investor, you must keep the following things in mind before participating in gold trading via MCX:
- Almost every listed broker charges a reasonable registration fee while registering you with MCX.
- If you execute gold transactions via a broker, you may have to pay a brokerage of around 0.1% to 0.25% of the transaction.
- The market trades are operational from 9:00 am to 11:30 pm. Therefore, you must trade in the given time slot only.
- Since it’s an online trade, a stable internet connection is required to begin the gold trade in MCX.
- Gold is traded in variants/bullions like Gold Guinea, Gold M and Gold Petal. The tabular representation below will give you an idea of their size and order weight.
- MCX trading in any commodity bears risks and repercussions. So, you must be aware of that before starting the trade.
Size of Gold Variants in MCX: A Tabular Representation
Gold in MCX comes in four variations: Gold, Gold Mini, Gold Guinea and Gold Petal. The size of the variant helps in determining the MCX rate for trading. So, whether you wish to know the Gold Mini lot size or the Gold Petal one, the table below will help you understand the sizes in a better way.
|Basis||Gold||Gold Mini||Gold Guinea||Gold Petal|
|The contract size of the variants||1 kg||100 g||8 g||1 g|
|Tick size to consider||INR 1/10 g||INR 1/10 g||INR 1/8 g||INR 1/1 g|
|Maximum order size||10 kg||10 kg||10 kg||10 kg|
|The expiry date of the variants||5 th day of the expiring month||5 th day of the expiring month||Last day of the calendar month||Last day of the calendar month|
Online trading is booming in India. With many emerging trading platforms online like MCX — one can easily trade for stocks, commodities and more. MCX is the largest commodity derivative exchange platform that makes trading in commodities a new trend. Gold trading in MCX is the most beneficial investment of all listed commodities. The ever-rising gold demand makes it less risky to trade in gold than other commodities. You must register in MCX and find a reliable broker to participate in the demanding MCX gold trading.