COMMODITY DERIVATIVES ON MULTI COMMODITY EXCHANGE: A PERFORMANCE EVALUATION

Abstract

The Multi Commodity Exchange of India (MCX) plays a vital role in trading commodity derivatives, offering futures and options contracts across diverse segments such as bullion, base metals, energy, and agricultural commodities. This research paper presents a comprehensive performance evaluation of commodity derivatives traded on the Multi Commodity Exchange (MCX) over nine years from 2015 to 2023, especially after the 2015 SEBI as the regulatory body for the Commodity market, emphasizing comprehensive segment & commodity-wise such as Cotton, Nickel, Gold, Natural Gas and so on, performance evaluation on the derivatives markets. By analyzing yearly data of various commodity groups - base metals, bullion, energy, and agriculture - this study aims to identify trends, assess market fluctuations, and understand the dynamics of the commodity derivatives market in Multi Commodity Exchange. Using statistical techniques like linear regression, descriptive analysis, and basic trend analysis, we examine the trading volumes and values of all commodities traded in MCX like cotton, gold, crude oil, silver, etc. Through its comprehensive examination of these segments, this research paper offers valuable insights into the complex interconnections inherent in commodity derivatives trading. Additionally, the study examines how market trends and other factors affect commodity performance and identifies the reasons for market fluctuations. These results highlight major trends and the overall performance of commodities that can help market participants make vital decisions. This study tries to contribute to the body of knowledge by providing an adequate and detailed analysis of the growth and performance of commodity derivatives on the Multi Commodity Exchange of India (MCX).