With volumes soaring and profit run-rates touching records, MCX is emerging as the equity-market proxy for India’s obsession with precious metals.
Shares of MCX have risen 64.56% in the last six months closing at ₹9,332 on Fridays well ahead compared to the 25.73% rise in shares of BSE Ltd, which runs that Bombay Stock Exchange. National Stock Exchange Ltd is not listed.
Domestic gold prices have risen nearly 10% month-on-month in October as festive consumption added to its safe-haven appeal amid looming global uncertainties, while silver has surged over 20% with rising industrial demand.
Traditionally, Dhanteras has marked the beginning of the gold-buying season in India — a cultural and emotional anchor for long-term wealth preservation.
But the sparkle of gold and silver extended beyond jewellery counters to the derivative market well ahead of Dhanteras, as their price and volatility spiked in September. Both metals have accounted for nearly 80% of MCX’s total futures volumes since September 2025, compared to 75% in H1FY26, noted ICICI Securities.
Trading activity has surged further in October. The brokerage reported that MCX’s futures average daily turnover (ADTV) jumped 76% month-on-month to ₹98,400 crore in October so far, while options premium ADTV rose 44% to ₹6,800 crore.
Swapnil Aggarwal, director at VSRK Capital, a wealth management firm, expects the dominance of bullions to continue, supported by steady demand from manufacturers, jewellers, and exporters. “It adds resilience but also makes MCX more sensitive to price swings (in gold and silver),” Aggarwal said.
A festive boom?
The festive season has accentuated that sensitivity. Silver imports have nearly doubled from last year, ETF inflows have firmed up, and retail participation in commodity derivatives has soared as investors, taking a breather from equity derivatives, seek action in commodities.
Retail participants currently contribute to 40% of the trading activity in MCX. They mostly participate in option trades, which is less capital intensive compared to futures.
In fact, options now contribute 60-65% of MCX’s operating revenue, compared with roughly 30% from futures, according to HDFC Securities. That transition coincided with the introduction of smaller, retail-friendly “mini” contracts and the shift from bi-monthly to monthly expiries.
“The move to monthly expiry has worked like an accelerant (for retail investors),” says Santosh Meena, head of research at Swastika Investmart, a listed brokerage. More frequent expiries in times of higher volatility mean traders roll over positions faster, increasing the exchange’s transaction revenue, he noted.
“MCX’s trading volume is primarily driven by market volatility. Unless volatility drops significantly, we are unlikely to see a substantial decline in volumes, despite the latest margin hikes,” he added.
Bullion ride
MCX recently increased the minimum initial margin requirement on gold futures by 100 basis points (bps) to 7% and on silver futures by 150bps to 12.5%, in response to heightened volatility in precious metals. (A bps is one-hundredth of a percentage point.) Experts expect this move to only deter short-term or highly leveraged participants, with limited long-term impact on the exchange’s trading volumes.
Nonetheless, ICICI Securities expects MCX annual profit for FY26 to cross ₹1,500 crore if its current trading volumes and profitability continue the rest of the year. HDFC Securities expects the bullion boom to fuel MCX’s profit margin above 55% in the third quarter — well ahead of NSE’s estimated 35-45% and slightly above BSE’s 45-50%.
Looming risks
While MCX enjoys near monopoly on commodity derivatives with high operational leverage, beneath the glitter lies a subtle challenge.
As MCX’s trading mix shifts toward bullion, its premium-to-notional (P/N) ratio – a key indicator of revenue yield – has been trending lower. HDFC Securities notes that gold and silver options have P/N ratios of 0.5-0.6%, compared to 1.6-2.8% for crude and natural gas contracts.
Crude oil and natural gas contracts typically have longer expiry and are more volatile than gold and silver, resulting in higher option premiums. But as bullion trades are taking over, the blended ratio is projected to fall to 0.9% by FY27, from 1.63% in FY25.
This matters because MCX earns transaction fees on premium turnover, not notional value. As lower-yield bullion contracts dominate, this would mean despite more trades, the exchange will earn less revenue per trade.
Raj Gaikar, research analyst at SAMCO Securities, cautions that this could temper medium-term optimism. “MCX trades at premium valuations relative to peers, reflecting optimism about rising volumes, expanding margins and platform stability,” he says. “But unless revenue growth accelerates further, the upside from current levels may be limited.”
MCX has gained almost 49% so far this year and is trading at roughly 73 times its FY26 earnings, a 9% premium to BSE, according to Swastika Investmart’s Meena.
MCX stands out among its peers due to its product specialization, lower regulatory overhang and volatility-linked revenue model, notes Jateen Trivedi, vice president of commodity and currency research at LKP Securities. “The ongoing bullion boom has created a positive market sentiment for MCX,” he added.
Experts note that MCX presents a unique Dhanteras play for investors — an equity that mirrors the shine of gold and silver, but with the scalability of a platform business. “While it’s more volatile than NSE or BSE, it’s also better positioned to benefit from rising global uncertainty,” said VSRK’s
Nonetheless, experts cautioned that sustained double-digit volume growth and institutional traction will remain key to justifying MCX’s current valuations.