TALK ON “COMMODITY DERIVATIVES AND TRADING AT MULTI-COMMODITY
EXCHANGE”
Rapporteur: Ms. Soorvi Shah (16BLS182) and Dr. Nausheen Nizami
12 Sept. 2019: The Economics Faculty of Department of Social Sciences, School of Liberal Studies,
organized a talk on ‘Commodity derivatives and trading at Multi-commodity exchange’ on 12th
September 2019. The speaker was Mr. Shrikant Koundinya who is the vice president of Multi-
Commodity Exchange (MCX) and has a profound and deep experience in capital markets since a long
time. Ms. Saheli Das (Economics Major, VII semester) and Dr. Nausheen Nizami (Faculty) welcomed
the guest for the expert session. Dr. Prashanta Panda, The Head-Department of Social Sciences,
SLS, delivered the inaugural address to sensitise students about the importance of learning about
derivatives and derivative exchanges in India. Prof Nigam Dave, the Dean and Director, SLS, also
encouraged the audience with his presence during the session.
Multi-Commodity Exchange (MCX) is India’s largest commodity exchange. It is India's first listed,
state-of-the-art, commodity derivatives exchange that facilitates online trading of commodity
derivatives transactions, thereby providing a platform for price discovery and risk management.
The session began with a demonstration of theMCX live market which had 4 commodities: Gold,
crude oil, cotton and Zinc. The live market demonstrated the buyer and seller price along with the date
and time.The market works on the principal of perfect competition which offers homogeneous product
and standardised quality. This market has free entry and free exit. The market opens at 9:00 am and
closes at 11:55 pm and in this span, the commodities can be bought and sold.
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MCX Mumbai conducted an Awareness Programme on Commodity Derivatives
for students of PDPU
Expert engagement with the audience on ‘Why are commodity markets important?' Every single thing
that we use, right from a spoon,made of steel and iron, to the car we use to commute, which uses
copper, plastic and lead batteries- all the base metals are commodities which are raw materials. Thus
it makes the prices of the commodities very crucial for trade. Mr. Koundinya highlighted that 85 % of
the commodities worldwide are traded in dollars. The reason for it dates back to 1972 ,when the US
made an agreement with Saudi Arabia, stating that all the crude oil trade should take place in dollars.
This was the contract that gave the dollar the significant role of the medium of exchange.
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