The number of traders participating in commodity derivatives on the Multi Commodity Exchange of India (MCX) has increased even as participation in equity futures and options (F&O) has declined, according to data shared by Zerodha co-founder and CEO Nithin Kamath.
The number of clients trading commodity derivatives on MCX rose from 13 lakh in FY25 to 20.9 lakh in FY26. In contrast, the number of individual investors trading equity derivatives on the National Stock Exchange (NSE) fell from 1.06 crore to 85 lakh over the same period.
In a post on X (formerly Twitter), Kamath highlighted the contrasting trends and suggested that the growth of options trading on MCX could be one factor behind the increase in commodity market participation.
He also raised the possibility that heightened volatility in commodities such as crude oil, natural gas, gold and silver, along with brokers promoting commodity options after equity markets close, could be contributing to the trend.
What Zerodha’s data show about MCX and equity F&O traders
Data shared by Zerodha show that the number of clients trading commodity derivatives on MCX increased steadily from 4.7 lakh in FY22 to 20.9 lakh in FY26.
Over the same period, the number of individual investors trading equity derivatives on the NSE initially increased before declining in FY26.
| Financial year | MCX commodity traders | Equity F&O traders | MCX traders as a percentage of equity F&O traders |
|---|---|---|---|
| FY22 | 4.7 lakh | 51 lakh | 9.20% |
| FY23 | 6.2 lakh | 67 lakh | 9.30% |
| FY24 | 9.3 lakh | 96 lakh | 9.70% |
| FY25 | 13 lakh | 1.06 crore | 12.30% |
| FY26 | 20.9 lakh | 85 lakh | 24.60% |
| April-June 2026 | 13.7 lakh | 50 lakh | 27.30% |
| Zerodha, citing NSE Market Pulse reports from April and July 2026, MCX annual reports and its Q1 FY27 presentation. | |||
The number of MCX commodity traders more than quadrupled between FY22 and FY26. The number of equity F&O traders, meanwhile, fell by nearly 20% between FY25 and FY26.
The ratio of MCX commodity traders to equity F&O traders increased from 12.3% in FY25 to 24.6% in FY26. It stood at 27.3% in April-June 2026.
These figures compare participation in two different market segments. They do not establish that investors have shifted from equity derivatives to commodities, nor do they measure trading volumes or the value of transactions.
Why could commodity trading be gaining traction?
Kamath identified the growth of options trading on MCX as one possible factor behind the increase in commodity market participation. He also pointed to heightened volatility and the availability of trading opportunities after equity markets close.
However, he did not establish how much each factor contributed to the rise in trader numbers.
Growth of commodity options: Options allow traders to take positions based on expected price movements without necessarily buying or selling the underlying commodity. Their growing availability could be attracting more participants to the commodity derivatives market.
Volatility in commodity prices: Gold, silver, crude oil and natural gas can experience sharp price movements in response to global economic developments, geopolitical tensions, supply disruptions and changes in demand. These movements can attract traders seeking to benefit from price changes, although volatility can also increase the risk of losses.
Extended trading hours: MCX’s trading session continues into the evening, allowing participants to respond to developments in international commodity markets after Indian equity markets close. Kamath suggested that brokers promoting commodity options during these hours could also be contributing to the trend.
The available data do not establish whether any of these factors is the primary reason for the increase in commodity traders.
What is MCX and how does commodity trading work?
The Multi Commodity Exchange of India is an electronic exchange that facilitates trading in commodity derivatives. It provides a platform for contracts linked to commodities such as gold, silver, copper, crude oil and natural gas.
Commodity derivatives are financial contracts whose value is linked to an underlying commodity. Traders can use them to take positions based on expected price movements, while businesses may use them to hedge against changes in raw material costs.
For example, a trader expecting gold prices to rise may buy a gold futures contract. If prices increase, the position could generate a profit. If prices move in the opposite direction, the trader could incur a loss.
Unlike buying physical gold or silver, trading commodity derivatives does not necessarily involve taking possession of the underlying commodity. Settlement depends on the terms of the specific contract, including whether it provides for cash settlement or physical delivery.
MCX operates under the regulatory framework overseen by the Securities and Exchange Board of India (SEBI).
Which commodities are traded on MCX?
MCX offers derivatives contracts across several commodity categories.
- Bullion: Gold and silver.
- Base metals: Copper, aluminium, zinc, lead and nickel.
- Energy: Crude oil and natural gas.
- Agricultural commodities: Selected contracts linked to eligible agricultural products.
Gold and silver prices can be influenced by interest rate expectations, movements in the US dollar and demand for safe-haven assets. Crude oil and natural gas prices respond to global supply and demand, production decisions, geopolitical developments and weather conditions.
Base metals such as copper and aluminium are sensitive to industrial demand, manufacturing activity and the availability of raw materials.
These factors can create trading opportunities but can also lead to sudden price movements that work against traders’ positions.
How do MCX trading hours compare with equity market hours?
One factor Kamath highlighted was the ability to trade commodities after the regular equity market session.
MCX’s extended trading hours allow participants to respond to international commodity market developments during the evening. This can be particularly relevant for energy products and precious metals, whose prices are influenced by global events and overseas trading activity.
The additional trading window can be convenient for people who cannot actively monitor markets during the day. It also allows traders to react to developments that emerge after Indian equity markets close.
However, longer trading hours do not necessarily translate into better trading outcomes. Commodity derivatives remain subject to market volatility, and traders can incur substantial losses when prices move against their positions.
What risks should commodity traders know about?
Commodity derivatives can be used for hedging, portfolio diversification and taking positions on expected price movements. However, traders need to understand the risks before participating.
Leverage and margin requirements: Futures and options involve margin requirements and other contract-specific obligations. Leverage can magnify both gains and losses.
Price volatility: Commodity prices can change sharply following geopolitical developments, supply disruptions, weather events or economic announcements.
Contract expiry and settlement: Each contract has an expiry date and specific settlement conditions. Traders must understand these terms, particularly where physical delivery applies.
Risk management: Position sizing and a clear understanding of contract specifications can help traders manage their exposure, although they cannot eliminate the risk of losses.