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News Topical, Digital Desk : A big update has come regarding electricity futures. MCX (Multi Commodity Exchange) has now got approval from SEBI to start electricity futures trading. After this, there has been an increase in activity in the market and investors are now eyeing IEX and MCX.

Why did IEX see a boom?
IEX (Indian Energy Exchange) is the country's largest electricity exchange, where real-time and short-term electricity trading takes place. Now when MCX launches electricity futures, it will get data and benchmark pricing from IEX itself.

This means that IEX will be used as the base price for futures deals. This is the reason why buying was seen in IEX shares after the news.

What will be the benefit of this step?
Transparency in electricity prices will increase. Power companies and large consumers will get the option of hedging. The variety of financial products in the energy sector will increase

Why is this step important
This is the first time that futures trading is going to start for a commodity like electricity in India. Electricity futures trading already takes place in many countries of the world, but it had not started in India till now.

After SEBI's approval, MCX can launch this new product soon, and IEX's role is going to be important here.


Read More: Stock of the day: Why did the shares of IEX and MCX rise so fast?

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