BULLDEX
Also written MCX BULLDEX · MCX iCOMDEX Bullion Index
MCX's sectoral index tracking sentiment in the precious metals segment, currently weighted roughly 60% gold and 40% silver, based on futures prices rather than spot.
In plain language
A trader who wants one reading on the whole precious metals market does not have to watch gold and silver futures separately. There is a single number for that: BULLDEX.
It is built almost entirely from gold and silver. So it moves the way those two metals move together.
That makes it useful as a benchmark, or as a single trade, for anyone who wants exposure to "precious metals" as a group rather than to just one metal.
How it works
BULLDEX is MCX's sectoral index for the bullion segment — part of the wider MCX iCOMDEX family. For the year 2025 (with effect from January 2025), its constituent weights are Gold: 60.12% and Silver: 39.88% — close to the 2024 weights of Gold 59.43% and Silver 40.57%.
Like other Indian commodity indices, it is built from futures prices of its constituents rather than spot prices, and functions as a total return index — capturing both price change and the roll income generated as expiring near-month futures positions are rolled into the next contract month. Because it is a sectoral index, the general 30% single-constituent weight cap that applies to composite indices does not apply to it — hence gold alone can sit at 60%.
A worked example
A jewellery retailer wants to hedge combined exposure to both gold and silver inventory without running two separate hedge books. Instead of calculating and trading gold futures and silver futures in the right ratio every month, it shorts BULLDEX futures in proportion to its combined bullion inventory value.
If gold rises 3% and silver rises 2% over the hedge period, BULLDEX moves by roughly a weighted blend — about 60% x 3% + 40% x 2% ≈ 2.6% — close to, though not identical to, the retailer's actual combined inventory move, since its own gold-silver mix may not exactly match BULLDEX's 60:40 weighting.
Why NISM asks about it
Chapter 2, sections 2.2 and 2.3, use BULLDEX repeatedly as the worked example of a sectoral index, including the specific 2025 and 2024 weight figures. Expect a question on its current gold-silver weighting and on why the 30% single-constituent cap that applies to composite indices does not apply to sectoral indices like BULLDEX.
Common exam traps
- BULLDEX weights are gold-heavy, not equal. Roughly 60:40 gold to silver for 2025 — do not assume an even split.
- The 30% single-commodity cap applies to composite indices, not sectoral ones. BULLDEX being ~60% gold is not a breach of any rule.
- BULLDEX is a total return index, like all Indian commodity indices built on futures prices — it is not purely a spot-price tracker.
Check yourself
1.In a composite commodity index, the weight of each constituent must lie between:
- a)A minimum of 1% and a maximum of 30%
- b)A minimum of 2% and a maximum of 40%
- c)A minimum of 5% and a maximum of 25%
- d)A minimum of 1% and a maximum of 15%
Show the answer
Answer: (a) A minimum of 1% and a maximum of 30%
In a composite index, each constituent has a minimum weight of 1% and maximum weight of 30% — and crucially, there is no such cap in the case of a sectoral index.
That exemption is what allows gold to hold 60.119248 percent of MCX BULLDEX, a bullion sectoral index, in 2025. Reading the 30 percent cap as universal is the commonest error in this chapter.
Option (b) describes what MCX has chosen for iCOMDEX — weights of 2% to 30% with a sectoral level cap of 40%. Exchanges may fix their own limits within the SEBI band, so MCX's narrower floor is an exchange choice, not the regulatory requirement the question asks about.
Option (d)'s 15% is the separate liquidity cap applied to a commodity that fails the ADTV test.
2.Commodity indices are described as price-based rather than volume-based. What does this mean?
- a)The index is calculated only once a day, from closing prices
- b)Weights remain fixed until a review, so the index captures only price movements
- c)Weights change daily with the traded volume of each constituent
- d)Only commodities with high trading volume can be included
Show the answer
Answer: (b) Weights remain fixed until a review, so the index captures only price movements
Commodity indices are price-based indices and not volume-based indices. Once weights are determined, the index will capture only price movements. Weight of securities will remain the same unless reviewed to be rebalanced.
The contrast with equity is the point of the rule: equity indices are volume-based, where weights of underlying securities keep changing daily depending upon market capitalization. The weight of Reliance Industries may move to 8% or 12% because of its price movement. But gold's weight in MCX BULLDEX will continue to be around 60% daily as its weight is kept constant at 60% during 2025.
The useful consequence: because the basket is fixed, a commodity index becomes a partial proxy of inflation in its sector. If MCX METLDEX goes up by 10% over one year, it indicates that inflation in the metal family is nearly 10% — subject to adjustments such as cost of carry on futures.
A market-cap-weighted index cannot do this, because its winners automatically enlarge their own influence.
3.On the sale of a commodity derivative, Commodity Transaction Tax is levied at 0.01 per cent and is payable by:
- a)The purchaser
- b)The seller
- c)Both parties equally
- d)The clearing member on behalf of both parties
Show the answer
Answer: (b) The seller
The CTT schedule makes the seller liable on every sale row:
Transaction Payable on Rate Payable by Sale of a commodity derivative Price traded 0.01% ⚠️ SELLER Sale of derivatives based on prices or indices of commodity derivative prices Price traded 0.01% ⚠️ SELLER Sale of an OPTION on commodity derivative ⚠️ Option PREMIUM 0.05% ⚠️ SELLER Sale of OPTION IN GOODS ⚠️ Option PREMIUM 0.05% ⚠️ SELLER Option exercised ⚠️ Settlement price 0.0001% ⚠️ PURCHASER Option in goods exercised with actual delivery Settlement price 0.0001% ⚠️ PURCHASER Option in goods exercised, settled OTHERWISE than by delivery ⚠️ Difference between SETTLEMENT AND STRIKE PRICE ⚠️ 0.125% ⚠️ PURCHASER Two patterns hold the whole table together: sales are taxed on the seller; exercises are taxed on the purchaser. And note that option CTT falls on the premium, not the contract value — which is why the 0.05% rate looks high but the rupee amount is small.
The outlier is the last row at 0.125% — an option in goods that is exercised but cash settled rather than delivered, taxed on the settlement-strike difference.
In the workbook's BULLDEX example, CTT on a Rs 7,50,000 contract is Rs 75, explicitly noted as "payable by the sellers only".
Where this is taught
Free preparation for NISM Series XVIRelated terms
- AGRIDEXNCDEX's agricultural commodity index, weighted across ten crops by production and liquidity — discontinued from 1 February 2022 after several of its constituent commodities stopped trading.
- CommodityUnder Indian commodity derivatives law, any tangible good other than actionable claims, money and securities — sold in large, uniform quantities and approved by the government and SEBI for futures trading.
- Composite indexA commodity index spanning several segments — energy, metals, bullion — whose constituents must each weigh 1 to 30 per cent, with at least 80 per cent of the weight in sufficiently liquid futures.
- Excess return indexAn index measuring an investment's performance purely against a benchmark or risk-free rate, without counting any income the underlying generates — the flip side of a total return index, which counts both.
- Sectoral indexA commodity index built from the futures of a single segment — bullion, base metals, energy or the guar family — with fixed annual weights and no 30 per cent cap per constituent.
- Average Daily Trading VolumeThe liquidity test a commodity future must pass before its price may carry weight in a tradeable commodity index — Rs 75 crore a day for agri, Rs 500 crore for non-agri.
- GUAREXNCDEX's sectoral commodity index on the guar family, with only two constituents — guar seed at 59.35% and guar gum at 40.65% for the year 2022-23.
- Law of averagesThe averaging effect that makes a commodity index less volatile than its constituents — useful diversification for a hedger, and the workbook's main explanation for why index derivatives stay illiquid in India.
- METALDEXMCX's base metal sectoral index — for 2025, copper 40%, aluminium 30%, zinc 26% and lead 4% — which the workbook also reads as a rough inflation gauge for the metals family.
- Price-based indexAn index whose constituent weights stay fixed for the year, so the level moves only when prices move — how every Indian commodity index works, as against volume-based equity indices.