Mumbai :
The Bombay Stock Exchange (BSE) is reportedly considering the launch of gold and silver futures contracts.
Although a BSE spokesperson declined to comment on the matter, market experts believe this move could significantly impact the bullion market,
particularly for the Multi Commodity Exchange (MCX), which is currently the market leader.
Potential Impact on MCX
The introduction of these contracts by BSE could potentially reduce MCX’s market share and trading volumes.
However, the extent of this impact will largely depend on BSE’s execution strategy and its ability to attract traders away from MCX.
While BSE’s move might appear promising, it faces stiff competition from the established MCX,
which has maintained a strong foothold in the commodities trading space.
Regulatory Context and Market Dynamics
This development comes on the heels of proposals by SEBI’s working committee on equity derivatives to limit amateur investor participation in options trading.
These proposals include introducing one weekly option contract per exchange and raising the minimum contract value by 4 to 6 times.
If implemented, these changes could affect BSE’s growing derivatives segment, potentially influencing its decision to venture into gold and silver futures.
Bhavik Patel, Senior Commodities Analyst at Tradebulls Securities, commented on the situation, stating
“The launch of gold and silver contracts on BSE will likely have minimal impact on MCX’s market share.
Even the National Stock Exchange (NSE) has not been able to capture a significant share from MCX. Commodity traders generally prefer to stick to their established trading platforms.”
