How is the futures contract of IIBX different from MCX?

 Here’s a comprehensive breakdown of how IIBX’s gold futures contract differs significantly from MCX’s futures offerings—covering structure, products, participants, market access, and strategic roles.

1. Regulatory & Institutional Framework

  • IIBX (India International Bullion Exchange) is regulated by the International Financial Services Centres Authority (IFSCA) and operates out of GIFT IFSC, Gujarat, focused on the international bullion market within India's IFSC jurisdiction.

  • MCX (Multi Commodity Exchange) is overseen by SEBI, serving the nationwide derivatives market from its base in Mumbai.

2. Contract Type & Purpose

  • IIBX contracts are USD‑denominated gold kilo futures, designed for onshore yet international-price exposure, suitable for hedging actual bullion trades—especially for qualified jewellers, importers, refiners, and certain banks, mostly institutional participants.

  • MCX gold futures are rupee‑denominated contracts in various lot sizes: 1 kg (standard), 100 g (Mini), 8 g (Guinea), 1 g (Petal), and since April 2025, a 10 g contract (Gold Ten) meant to cater to smaller investors.

3. Contract Specifications & Quotation

Feature IIBX Gold Futures MCX Gold Futures (Standard & Gold Ten)
Lot Size 1 kg (32 troy ounces) 1 kg (standard), 100 g, 8 g, 1 g, and 10 g (Gold Ten)
Price Quotation USD per troy ounce INR per 10 g/gram depending on contract (e.g., ₹1 tick = ₹1 per 10 g for Gold Ten) 
Tick Size USD 0.10 (~USD 3.2 per contract) ₹1 per 10 g (≈₹1 per contract minimum granularity
Contract Month Cycle Jan, Mar, May, Jul, Sep, Nov; up to 8 active contracts  Monthly launches on the 16th of month, expiry typically on 5th of expiry month (standard lots) 

4. Trading Hours & Settlement Procedures

  • IIBX functions in two IST sessions: 04:30–17:00 and 17:00–02:30, with cash settlement in USD based on DGCX gold futures settlement price at expiry (E‑day) .

  • MCX has a single trading window from about 09:00–23:30 IST, and settlement is usually compulsory physical delivery by expiry (5th of the month), unless squared off before that.

5. Delivery & Physical Settlement Modes

  • IIBX: Settlement is cash in USD by default. Physical delivery allowed only for Qualified Suppliers and Qualified Jewellers, via Bullion Depository Receipts (BDRs) backed by vault inventory. Non‑resident/DTA participants typically cash‑settle.

  • MCX: Delivery is compulsory for eligible contracts (USD or INR-settled). Deliveries are made via approved delivery centres (e.g. Ahmedabad, Mumbai, Delhi). Buyers receive 999 purity LBMA-standard gold bars; delivery-intent is declared before expiry.

6. Margins, Position Limits & Risk Control

  • IIBX margin: Minimum 6% or VaR‑based margin, along with real‑time stress-testing and extreme loss buffers. Position limits: brokers capped at 30% of open interest or 500k contracts; clients capped at 10% or 50k contracts. Price bands relax from 3% to max 9% daily based on volatility.

  • MCX margin: Initial margin of minimum 6% or SPAN-based; extreme loss margin 1%; delivery period margin = higher of 3% + 5-day 99% VaR or 25% depending on contract duration. Position limits for Gold Ten contracts: individual clients max 5 MT or 5% of open interest; member firms up to 50 MT or 20% open interest.

7. Market Participants & Access

  • IIBX: Restricted to qualified professional participants such as qualified jewellers, bullion importers, banks, and designated institutions, with specific licensing and USD account structures. Not available to retail traders or standard Indian brokers.

  • MCX: Open to retail traders, investors, brokers, hedge funds, and institutional clients across India via registered commodity brokerage firms.

8. Strategic Role & Purpose

  • IIBX supports India’s “onshore the offshore” initiative: domestic entities can hedge international bullion exposures via a regulated Indian venue, reducing reliance on overseas exchanges. It's designed as a global-price physical bullion hub.

  • MCX enables commodity price risk management for a wide range of investors across diverse commodities—not just bullion—and supports portfolio diversification and retail participation in derivatives markets.

✅ Key Takeaways

  • IIBX vs MCX differ fundamentally in scope, scale, and regulatory orientation.

  • IIBX caters to institutional bullion providers/importers and offers USD‑settled, kilo‑sized contracts suited for real inventory hedging.

  • MCX offers INR‑based derivatives in various sizes accessible to retail and institutional traders nationwide.

  • Delivery and pricing mechanisms differ sharply: IIBX delivers via BDRs for certified participants under IFSC rules; MCX ensures mandatory delivery under SEBI-regulated mechanics.

  • Margins, position thresholds, risk controls, and daily limits are tailored to their distinct product, participant, and regulatory niches.

If you'd like an in-depth look at silver contracts, IIBX’s expansion roadmaps, or a step-by-step guide to trade or qualify on either platform, I’m happy to help!

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