India’s largest commodity exchange the Multi-Commodity Exchange of India Ltd (MCX) on August 24 launched the country’s first bullion index, MCX iCOMDEX Bullion , or Bulldex.

The index will track the real-time performance of the gold (1kg) and silver (30kg) futures contracts. The weigthage of gold is 70.52 percent and the remaining 29.48 percent is silver. The weights will be rebalanced every January.

“The product will help market participants to optimise their asset allocation through portfolio diversification due to its low correlation to equity. The real-time index values will also act as the perfect benchmark that can be replicated with low tracking error for passive investment strategies and help in managing portfolios efficiency,” MCX MD & CEO PS Reddy said.

The bullion index futures contracts expiring in the months of September, October and November are now available for trading.

The contract has a lot size equal to 50 times of underlying MCX iCOMDEX Bullion Index. The tick size (minimum price movement) for the contract is Re 1.The contracts will be settled in cash at the expiry of each contract.

The contract has a lot size equal to 50 times of underlying MCX iCOMDEX Bullion Index. The tick size (minimum price movement) for the contract is Re 1.The contracts will be settled in cash at the expiry of each contract.

The final settlement price will be the underlying index price arrived at based on Volume Weighted Average Price of the constituents of the underlying index between 4pm and 5pm on the expiry day of the futures contract. The exchange has waived the transaction fee for the first three months.