ICEX launches 30 cents diamond futures contracts to attract small investors

The exchange currently offers 1 carat (100 cents) and 50 cents polished diamond contracts on its platform

Last Updated : Apr 13 2018 | 4:21 PM IST

Reliance ADAG anchored Indian Commodity Exchange Limited (ICEX) has launched 30 cents polished diamond futures contracts on its platform to attract small investors and make natural precious stone popular amongst average middle class.

The exchange currently offers 1 carat (100 cents) and 50 cents polished diamond contracts on its platform.

ICEX was the first company globally, to launch diamond derivatives contracts on August 28, 2017. The commodity exchange had started operations with 1 carat futures contracts and had subsequently added the 50 cents contracts. With the addition of 30 cents, ICEX now also serves a larger chunk of the diamond industry in terms of providing direct hedging facilities.

Initially, three monthly futures contracts of 30 cents diamonds will be available for trading on the exchange platform– July 2018, August 2018 and September 2018. The important quality parameters for diamonds to be traded on the exchange platform are HVS2, triple X with pointed culet and negligible fluorescence. Since its launch in August 2017, the exchange has witnessed the delivery of 282.39 carats of diamond valuing Rs 80.2 million.

Earlier last month, ICEX had started the facility of delivering the diamond purchased by clients on its platform to their doorstep.

“In an exchange environment, the physical delivery is effected from its designated warehouse where client or representative has to come physically to take delivery. Such a practice dissuades buyers who belong to locations other than the designated delivery centers. ICEX understood the gap and devised a mechanism wherein the vault agency delivered the diamond bought by the investor at the doorstep of the client,” said Sanjit Prasad, Managing Director and Chief Executive Officer, ICEX.

On ICEX, investors can trade in polished diamond with a minimum price of 1 cent like systematic investment plan (SIP) which over a period of time gets accumulated to the deliverable size of the contract.