The Chittagong Stock Exchange (CSE) is preparing to start mock trading in the country’s first commodity futures market in October, eyeing live trading by the year end.
The move follows the publication of the Chittagong Stock Exchange (Commodity Derivatives) Regulations, 2025, in mid-July by the Bangladesh Securities and Exchange Commission (BSEC). These regulations set out how commodity futures contracts — agreements to buy or sell a commodity at a fixed price on a future date — will operate.
CSE plans to begin with three cash-settled futures: gold, silver and crude palm oil, according to CSE Managing Director M Shaifur Rahman Mazumdar, who confirmed the planned timeline.
Cash-settled means traders don’t actually receive the physical commodity; instead, gains or losses are calculated and paid in money when the contract ends.
According to Mazumdar, globally 90 per cent of contracts for precious metals like gold are settled in cash, since investors usually prefer financial exposure over physical delivery.
However, agricultural commodities need more physical settlement. “CSE is awaiting a stronger ecosystem with proper brokering services, warehousing, commodity standards, grading and physical delivery systems before moving into farm goods,” he said.
“The initial contracts will allow both long and short positions,” Mazumdar told TIMES of Bangladesh.
A long position, he explained, is when an investor buys a contract hoping the price will rise, while a short position is when someone sells a contract without owning it, expecting the price to fall so that it can be bought back cheaper.
“This means investors can benefit whether the market moves up or down, one just needs to anticipate it right,” he said.
Even so, Mazumdar shared that the exchange intends to gradually extend contracts to agricultural commodities once the necessary infrastructure develops. For farmers and agribusinesses, such futures could stabilise earnings in the face of unpredictable harvests and volatile international prices.
He added that intraday trading of the commodity futures contracts will also be possible. Intraday trading means buying and selling on the same day to take advantage of quick price swings. “For example, a trader could buy gold futures in the morning and sell them by afternoon if the market shifts,” he explained.
These contracts will allow operating on a margin system, where traders pay only 5–10 per cent of the contract value upfront. “If the margin is 10 per cent, an investor with Tk 1 lakh can trade futures contracts worth Tk 10 lakh,” Mazumdar said, adding this leverage creates opportunity but also magnifies risk.
Businesses will be able to use the contracts for hedging, which means protecting themselves against sudden price changes, he added.
For example, a jeweller or a palm oil refiner needs to lock international contracts for physical delivery of the commodities they need as raw material, regardless of the price. They bought it at a price and are afraid that the price might drop in the coming days.
The CSE commodities contracts will allow them to sell short and if the market really falls the financial loss in international trade can be offset with the short position.
Also, cash surplus firms and individuals can trade the contracts for capital gains, diversifying the investment opportunities for Bangladeshis.
Clearing and settlement of the futures contracts will be handled by a central counterparty, which will act as a guarantor for trades, manage margins and create a default fund to ensure stability if a trader fails to pay.
Investment professionals hailed the CSE plans.
“Gold futures, in particular, will be transformative,” said Ershad Hossain, senior director of Lion City Advisory Limited.
While official gold imports are around Tk 45 crore annually, actual demand is estimated at up to $6 billion. “Futures will finally provide jewellers and investors with a legal, transparent tool to manage risk without needing to store physical gold,” he told TIMES of Bangladesh.
Hossain called the move “a milestone for Bangladesh’s financial sector,” arguing that commodity futures will improve price discovery, boost transparency and reduce reliance on informal markets.
He suggested that CSE also introduce USD/BDT currency futures. “The interbank dollar-taka market is very thin, with daily turnover of just $20–40 million. Cash-settled currency futures could help businesses hedge foreign exchange risk,” he said.
He further recommended futures based on the DSEX 30 index, which tracks the top 30 listed companies. “The absence of short-selling and hedging tools deters institutions and leaves retail investors chasing risky small caps. Index futures would add depth and stability,” Hossain added.
The CSE initiative is being developed in partnership with India’s Multi Commodity Exchange (MCX) under a 2022 agreement approved by BSEC.
Mazumdar concluded that the new platform will not only give traders opportunities but also offer businesses protection. “Our aim is to provide modern tools that reduce uncertainty, encourage liquidity and attract global participation,” he said.