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 the average middle class.
The exchange currently offers 1 carat (100 cents) and 50 cents polished diamond contracts on its platform where small investors need to wait to take delivery till their invested amount accumulates equivalent to the value of these stones.
“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.
ICEX had created history by launching the world’s first 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 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. Logistic partner of exchange for the delivery is Malca Amit, which ensures safe and smooth delivery to the client.
“We have had a superb experience with the ICEX through the right entire process – right from the time of opening a brokerage account, to buying the diamond futures contracts to getting proceeds credited to my demat account and then delivery. Diamond delivery on ICEX is smooth and risk-free. The stones were delivered in tamper-proof covers, with certificates evidencing all details of the same. The facility of price discovery through an open and transparent process followed by ICEX has truly added to the entire experience. The small 30 cents polished diamond contract would help attract small investors on the exchange platform,” said Narayanan Venkatraman, a Benguluru based diamond trader.
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.