The launch of the new commodity derivatives platform by MCX faced teething-trouble with connectivity issues, delay in price updates and receiving trade confirmation.
Sensing an opportunity to attract trading volumes, the rival National Stock Exchange launched 13 new commodity derivatives contracts including gold and base metals on Monday. With this launch, NSE offers 28 products in the Commodity Derivatives segment.
MCX had switched to the new software developed by Tata Consultancy Services on Monday after two unsuccessful attempts. The software change was necessitated after it decided to enter new trading segments and sever ties with the erstwhile promoter and software servicing company 63 Moons (previously Financial Technologies).
The stability of the new software will be known in the second session when MCX draws reference rates for crude oil from the CME, gold from US exchange and other metal prices from the London Metal Exchange.
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In preparation for the launch of the new software, MCX has shifted non-agriculture trading timing from 10.45 am to 11.30 pm. Select Agri Commodities (Cotton & kapas) can be traded between 10.45 am and 9 pm while all other agriculture commodities will be traded between 10.45 am to 5 pm.
52-week high
Shares of MCX hit a 52-week high of ₹2,217 a share on Monday but closed at ₹2,197 on profit-booking.
Shrey Jain, founder & CEO, SAS Online, a deep discount broker said it was facing issues with broadcast and is in touch with the exchange to resolve this on priority. “Further multiple contracts are seeing lower volumes and higher bid-ask spreads. As a risk measurement measure, we have blocked a few illiquid contracts and blocked market orders,” he said.
Meanwhile, the 13 new derivatives contracts launched by NSE include ‘Option on Futures’ on Gold (1kg), Gold Mini, Silver Mini, Copper and Zinc. It has also launched futures contract on Gold Guinea (8 grams), Aluminium, Aluminium Mini, Lead, Lead Mini, Nickel, Zinc and Zinc Mini.
Over the last few days, the exchange has launched six new derivatives contracts of Mini Futures and Options on Futures contracts on WTI Crude Oil and Natural Gas and Silver.
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The Exchange has set up dedicated teams to provide ease of onboarding for new trading members and existing trading members in other segments.
Sriram Krishnan, Chief Business Development Officer, NSE said with the launch of 13 new products , all key products in Energy, Bullion and Base Metals category are now available on NSE platform. This will enable participants to efficiently manage their risk across commodities on the exchange platform, he said.