The commodity market plays an important role in boosting the Indian economy. It is known that the Indian Stock Market is more popular when it comes to the number of traders participating and the amount of capital invested.However, trading of agro-based products is also very necessary to keep the trade market balanced. In our previous article we discussed the Multi Commodity Exchange (MCX), which happens to be the leading commodity exchange of the country. In this article we would like to focus on another crucial commodity exchange known as National Commodity and Derivatives Exchange Limited or NCDEX. MCX and NCDEX are both commodity trade exchanges yet different in the mode of operation and content of trade.
Discussed below in detail are facts and information every trader needs to know about the NCDEX.
What Exactly is NCDEX?
The National Commodity and Derivatives Exchange Limited or NCDEX is an Indian based public company. Founded on 23rd September, 2003, NCDEX is an online commodity exchange centre. It was incorporated under the Companies Act, 1956 and is regulated by the guidelines of the Securities Exchange Board of India (SEBI). The National Commodity and Derivatives Exchange has its own board of independent directors and is the only exchange for commodities in the country that is promoted by national institutions. It has offices based in Mumbai, Kolkata, Indore, Hyderabad, Jaipur, Ahmedabad and Delhi.It also launched a forward market in the year 2014.
NCDEX boasts advanced technology used to conduct its operations, such as the N-Charts, a free technical analysis tool for its users, and a proprietary warehouse accounting system called COMTRACK.
NCDEX is different from Multi Commodity Exchange (MCX) because MCX deals in hard commodities (core extracted metals), whereas NCDEX deals in soft commodities.The mode of operations also varies in both the exchanges.
Shareholder Consortium of the NCDEX
The shareholder mix of NCDEX has some very big names in the list. Some of the most well known ones are:
- National Stock Exchange of India (NSE)
- Life Insurance Corporation of India (LIC)
- National Bank for Agricultural and Rural Development (NABARD)
- CRISIL Limited
- Goldman Sachs
What Commodities are Traded on the NCDEX
The National Commodity and Derivatives Exchange offers trading in futures of 31 agricultural and non agricultural products. All soft commodities are traded through NCDEX. These soft commodities or Agricultural Products include:
- Chana MT1/MT2
- Maize Kharif
- Maize Rabi
- Plantation Products
- Other Products
- Guar Complex
- Guar seeds and gum
- Oil Seeds
- Mustard seeds
- Castor seeds
- Rapseed mustard seed oil cake
- Cotton seed oil cake
- Crude palm oil
- Soft products
You an also read What is Multi Commodity Exchange (MCX)?
Other Products Traded on NCDEX
- Precious Metals
- Gold (100g)
- Gold Hedge
- Gold Hedge (100g)
- Silver Hedge
- Silver Hedge (5Kgs)
- The National Commodity and Derivatives Exchange also offers a value weighted index called DHYAANA in the category of an information product. The value-weighted index computes and calculates values using the prices of the ten most liquid commodity futures on the NCDEX platform and acts like a free but reliable benchmark to compare the country’s agricultural commodities during trade.
The National Commodity and Derivatives Exchange is a large commodity exchange that serves as a platform for trading soft commodities and a few metals such as gold, silver, steel and copper. It has more than 600 warehouses with a capacity to hold 1.5 million tonnes of product at a single time. The average size of delivery is One Lakh Metric Tonnes (1,00,000 MT) at the end of a contract. The NCDEX also boasts 49,000 terminals which it trades through across a thousand terminals in the country. Surely, it is not as huge as the MCX which is the third largest in the world, but the NCDEX is a very crucial commodity exchange for the country.
Investors who are interested in trading through the NCDEX can easily hire assistance and guidance from NCDEX agents and brokers. But it is highly advised to start with the stocks futures markets if one has no experience in trading and then ease into trading commodity futures.
The Indian economy is dependent not only on the commodity market, but also the stock market. The stock market is highly lucrative and rewarding if a trader plays his cards right. A successful trader has many years of experience backing him, which is why he only ventures into zones and markets he is comfortable trading in. Apart from experience, learning new things about the trade market by reading and asking for help from trade experts when required is also very important.
Role of Indira Trade
IndiraTrade provides a solution to both the requirements, just a few clicks away. We provide expert and professional trading advice to traders on the lookout to seek help in maximizing their returns. On the educationalfront, our blogs are written with the aim to inform and educate all investors and traders. Every reader is sure to find something new to read at our blog and add to the knowledge skill-set of a soon to be extremely successful trader. For example, you could read about minimizing trading losses in our article “How to Minimize Stop- Losses?”
We wish you a successful trading day!