InvestorQ : Can you tell me about the METLDEX index that was launched by MCX?
Anu Biswas made post

Can you tell me about the METLDEX index that was launched by MCX?

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Ria Jain answered.
5 months ago
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India’s largest commodity trading exchange, MCX, has launched its second index for trading. Just a couple of months back, MCX had launched GOLDEX, an index created out of a portfolio combination of gold and silver. METLDEX has been launched as an index on base metals consisting of zinc, aluminum, copper and nickel.

The need to for commodity indices became urgent after the freak case of April 20 when the benchmark WTI crude closed in the negative due to delivery storage shortfalls. MCX crude oil contracts are benchmarked to WTI Crude in Texas and hence MCX settled the trade with negative prices. This caused huge losses to long crude oil traders.

That was when MCX underlined the urgent need to launch indices as they are safer, more stable and less vulnerable to price fluctuations like crude oil. Metldex is a portfolio of base metals so any abrupt movements in the price of a single base metal will not adversely impact index traders.

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