MCX Unveils Bulldex Index Options for Affordable Precious Metals Exposure

In a significant development, the Multi Commodity Exchange (MCX) has introduced Bulldex Index Options, a groundbreaking product that enables investors to gain exposure to both gold and silver in a single contract. This innovative offering provides a cost-effective way for bullion traders to diversify their portfolios.

The Bulldex index combines 1 kg gold and 30 kg silver contracts in a 60:40 ratio, offering investors the ability to trade the two precious metals simultaneously. Notably, the notional value of the Bulldex index is around ₹8.5-9 lakh, a significant reduction compared to the over ₹1.5 crore required to trade gold and silver futures separately.

The Bulldex options are expected to enhance liquidity and price discovery in the bullion market, as both the underlying gold and silver contracts are highly liquid. The new product also simplifies risk management, allowing hedgers to manage their exposure to gold and silver simultaneously. Retail investors can now enter the market with limited downside, as the maximum loss is capped at the premium paid.

The Bulldex index is rebalanced annually on January 1, maintaining a 60% weight for gold and 40% for silver to reflect market dynamics. MCX has clarified that margin requirements are adjusted based on market volatility, not price levels, to ensure orderly trading.