Diamond Derivatives, Successful At Last

I’ve always been an advocate for diamond derivatives but previous attempts at it have ended in failure.

Until 2017, where the first successful diamond exchange was built by the Indian Commodity Exchange. As of 2019, the exchange is still up and working well.

To get around the standardisation issue, contracts are offered as a 30 cent product basket for diamonds which are round brilliants, H/VS2, triple excellent, pointed culet and fluorescence none. The stones are certified and delivered through their logistics partner Malca Amit.

It is a great thing that the diamond industry can take advantage of hedging like in all other commodities markets. I hope that the exchange would be extended to diamonds with other characteristics – even fancy coloured ones.

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