In 2025, silver soared 170%, while gold climbed over 60%. The momentum spilled into 2026, with silver rising more than 70% in the first two months before correcting sharply, tumbling 42% from its January 29 record high of Rs 4.20 lakh. Gold, too, has cooled off, slipping 20% from its peak of Rs 1.93 lakh.
The sharp reversal triggered higher margin requirements aimed at curbing volatility. After nearly a month of turbulence and wide price swings, MCX and NSE withdrew the additional 7% and 3% margins on silver and gold contracts, respectively, starting February 19. The easing provided relief to sentiment, pushing MCX shares up as much as x% on the BSE today.
But after a 113% run-up, the key question is: has the stock run ahead of fundamentals?
During FY21, when crude oil prices turned negative amid the Covid shock, MCX sharply increased margin requirements on crude futures. The immediate impact was visible in volumes. Average daily turnover (ADTV) in crude futures plunged from Rs 17,200 crore in February 2020 to Rs 3,300 crore in April 2020.
Crude options premium ADTV rose as volatility surged. Premium turnover as a share of notional turnover increased from 2.2% in February 2020 to 3.9% in March 2020 and further to 8.3% in April 2020. Over the next few years, participation structurally shifted towards options. Crude options premium ADTV expanded from around Rs 5.5 crore in FY21 to Rs 2,120 crore in FY25 and about Rs 2,400 crore in FY26-to-date.
Since early February 2026, gold prices have declined roughly 10%, while silver is down about 33%. In response, average margin requirements for silver futures jumped from 15% earlier to 72% in February 2026. For gold futures, margins increased from 10% to 30%. The result has been a sharp contraction in futures activity. Gold futures ADTV fell 41% month-on-month to Rs 33,600 crore in February 2026-to-date, while silver futures ADTV declined 58% to Rs 22,700 crore over the same period.Yet, mirroring the crude episode of 2020, options activity has picked up. Premium turnover as a share of overall turnover in gold and silver options increased in late January and February 2026, indicating a shift in trader preference rather than an outright drop in participation.
Is the multiple really stretched?
The CME (Chicago Mercantile Exchange) is the world’s largest commodity derivatives exchange by open interest. Between 2004 and 2007, CME witnessed exponential growth in volumes, according to ICICI Securities. Options contracts traded rose from 48 million in CY04 to 107 million in CY07. Futures contracts doubled from 211 million to 432 million over the same period.
The surge in activity was accompanied by a sharp re-rating. CME’s trailing P/E multiple expanded from 24.62x in January 2004 to a peak of 49.31x in November 2006. Notably, the stock traded above 40x trailing earnings for 24 months between September 2005 and August 2008.
Outlook
The domestic brokerage has an Add rating and a target price of Rs 2,780 per share. That implies an upside potential of 19% from current levels. MCX’s futures average daily traded volume (ADTV) stood at Rs 55,800 crore for 9MFY26 and Rs 1,09,700 crore for January FY26-to-date. Based on the current trend, futures ADTV is projected at Rs 66,500 crore in FY26E, rising to Rs 80,000 crore in FY27E and Rs 90,000 crore in FY28E. These estimates imply a run-rate of Rs 98,700 crore in the remaining three months of FY26.
In the options segment, at the prevailing run rate, options premium ADTV is estimated at Rs 6,200 crore in FY26, Rs 8,100 crore in FY27 and Rs 9,500 crore in FY28, implying Rs 9,200 crore in the final quarter of FY26.
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