MCX launches Bulldex index options; new tool helps investors hedge against gold-silver volatility

The Multi Commodity Exchange (MCX) has introduced Bulldex Index Options, a groundbreaking product that allows investors to trade gold and silver together at a fraction of the usual cost, providing both diversification and affordability for bullion traders.

Explaining the innovation, Rishi Nathany, Chief Business Officer at MCX, said the Bulldex index combines 1 kg gold and 30 kg silver contracts in a 60:40 ratio, offering investors the ability to gain exposure to both precious metals in a single contract.

Talking to ET Now, Nathany said: “The notional value of the Bulldex index is around ₹8.5–9 lakh, compared to over ₹1.5 crore if investors were to trade gold and silver futures separately.” “It offers a much lower entry point, with reduced premiums and capped downside risk.”

Strategic hedge against bullion market volatility

The Bulldex options provide a strategic hedge against bullion market volatility while also enhancing liquidity and price discovery. Since both the underlying gold and silver contracts are highly liquid, the new options are expected to deepen participation from institutional investors, traders, and hedgers.

“This is a robust product that simplifies risk management,” Nathany added. “Hedgers can now manage exposure to gold and silver simultaneously, and retail investors can enter with limited downside, as the maximum loss is capped at the premium paid.”

The Bulldex index is rebalanced every year on January 1, maintaining a 60% weight for gold and 40% for silver to reflect market dynamics.

On the volatility front, Nathany clarified that MCX margin requirements are driven by market volatility, not price levels.

“Margins are adjusted based on perceived risk to maintain market integrity. As long as volatility persists, we’ll continue to take steps that ensure orderly trading,” he noted.

The launch of Bulldex options comes at a time when bullion demand remains strong, supported by festive buying and global uncertainties. With gold and silver prices showing heightened fluctuations, the new product offers a balanced, cost-efficient, and risk-mitigated entry point for investors looking to diversify their portfolios.

Key Takeaways

Bulldex: 60% gold + 40% silver exposure
Notional value: ₹8.5–9 lakh (vs ₹1.5 crore for individual futures)
Annual rebalancing: Every Jan 1
Ideal for: Retail investors, hedgers, and institutions seeking limited-risk exposure
Margins: Adjusted based on volatility, not price levels