The electronic trading system in the Commodities futures market of India with specific reference to MCX
Publisher: Prestige Institute of Management and Research Year: 2006
Abstract: After the recommendations of K N Kabra committee, government wanted to revamp the operations of commodities markets in India, which comprised of several regional ring based exchanges. With this objective, three national level online multi commodities exchanges were established. These were technology driven exchanges. This paper tries to identify the operational nitty-gritty of the online system of trading. The online system still remains a complex system for the traders who are used to the ring operations. The real strength of these online exchanges lies in the efficiency of its central processing engine. MCX, one of the three online exchanges is backed up by Financial Technologies, a renowned company dealing in software solution for financial markets in India. This provides them an edge in the technology implementation and up gradation. In this paper we try to discuss in detail how an online exchange (MCX) works and how all the operations take place on line. It also tries to see how the volumes are shifting from ring based exchanges to online exchanges and more to MCX.