Axis Securities, an arm of Axis Bank has introduced its services pertaining to trading in commodity derivatives on the Multi Commodity Exchange of India (MCX).
This launch makes it as the first bank subsidiary to offer the service. The wing will be performing the trading in commodity derivatives under the stock brokerage firm’s flagship brand Axis Direct.
The Reserve Bank of India (RBI) had permitted the bank subsidiaries to offer commodity broking services in September last year. This was done in sync with the Securities and Exchange Board of India’s (SEBI) plan to deepen the market.
The launch has enabled Axis Direct to expand its overall investment offering that currently includes equities, mutual funds, SIPs, IPOs, derivatives, bonds, NCDs, ETFs, company fixed deposits and overseas trading.
“We are extremely happy to be the first Bank led brokerage firm to launch Commodity Derivatives Trading for our customers. The move to allow Bank led brokers to offer commodity derivatives will not only expand the market volumes significantly but will also increase retail customer participation. Trading in commodities can be an important way to diversify a portfolio beyond traditional equities – either for the long-term or as a place to park cash during unusually volatile or bearish stock markets, as commodities traditionally move in opposition to stocks. With the launch of Commodities Derivatives, we have expanded the choice for derivative traders to choose a wide spectrum of commodities, index or equity as an underlying,” said Arun Thukral, MD & CEO, Axis Securities.
“The broking firm will also allow its members to trade on the National Commodity Derivatives Exchange (NCDEX) platform by end-September,” Thukral said.
While MCX is the leading stock market for metals and energy products, NCDEX dominates the bulk of the volume in agriculture commodity derivatives.