Indian Commodity / Bullion Market FAQs
1: What is commodity exchange?
A commodities exchange is an exchange where various derivatives (futures or options) and commodities products
are traded. Most commodity markets across the world trade in
Metal,Bullion,Fiber,Energy,Spices,Plantations,Pulses,Petrochemicals,Oil & Oil Seeds, Cereals and Others .These
contracts can include spot prices, forwards, futures and options on futures.
2: What is Commodity trading?
Commodities exchanges usually trade futures contracts on commodities, such as trading contracts to receive
something, say wheat, in a certain month. A farmer raising wheat can sell a future contract on his wheat, which will
not be harvested for several months, and guarantee the price he will be paid when he delivers; a wheat producer
buys the contract now and guarantees the price will not go up when it is delivered. This protects the farmer from price
drops and the buyer from price rises.
3: Commodity Exchanges in India?
Three multi-commodity exchanges in the country giving platform to retail investors to trade in commodity futures
without having physical stocks.
1. Multi Commodity Exchange (MCX)
Multi Commodity Exchange (MCX) is an independent commodity exchange with a permanent recognition from
Government of India based in Mumbai, India. MCX offers futures trading in Agricultural Commodities, Bullion,
Ferrous & Non-ferrous metals, Pulses, Oils & Oilseeds, Energy, Plantations, Spices and other soft commodities.
MCX has also setup in joint venture the National Spot Exchange a purely agricultural commodity exchange and
National Bulk Handling Corporation (NBHC) which provides bulk storage and handling of agricultural products.
WebSite:www.mcxindia.com
MCX offers futures trading in
Aluminium, Copper, Lead, Nickel, Sponge Iron, Steel Long (Bhavnagar), Steel
METAL
Long (Govindgarh), Steel Flat, Tin, Zinc
BULLION Gold, Gold HNI, Gold M, i-gold, Silver, Silver HNI, Silver
FIBER Cotton L Staple, Cotton M Staple, Cotton S Staple, Cotton Yarn, Kapas
ENERGY Brent Crude Oil, Crude Oil, Furnace Oil, Natural Gas, M. E. Sour Crude Oil
SPICES Cardamom, Jeera, Pepper, Red Chilli
PLANTATIONS Arecanut, Cashew Kernel, Coffee (Robusta), Rubber
PULSES Chana, Masur, Yellow Peas
PETROCHEMICALS HDPE, Polypropylene(PP), PVC
Castor Oil, Castor Seeds, Coconut Cake, Coconut Oil, Cotton Seed, Crude Palm
Oil, Groundnut Oil, Kapasia Khalli, Mustard Oil, Mustard Seed (Jaipur), Mustard
OIL & OIL SEEDS
Seed (Sirsa), RBD Palmolein, Refined Soy Oil, Refined Sunflower Oil, Rice Bran
DOC, Rice Bran Refined Oil, Sesame Seed, Soymeal, Soy Bean, Soy Seeds
CEREALS Maize
Guargum, Guar Seed, Gurchaku, Mentha Oil, Potato (Agra), Potato
OTHERS
(Tarkeshwar), Sugar M
2. National Multi Commodity Exchange of India Limited (NMCEIL)
National Multi Commodity Exchange of India Limited (NMCEIL) is the first demutualized, Electronic Multi-Commodity
Exchange in India.
3. National Commodity & Derivatives Exchange Limited (NCDEX)
National Commodity & Derivatives Exchange Limited (NCDEX) is a public limited company in Mumbai and the only
commodity exchang in the country promoted by national level institutions. It is managed by online multi commodity
exchange.
4. National Spot Exchange
National Spot Exchange is an commodity exchange in India that is a joint venture of Multi Commodity Exchange
(MCX) , Financial Technologies (India) Ltd. (FTIL) and National Agricultural Cooperative Marketing Federation of
India Limited (NAFED).
Its stated mission is to develop a Common Indian Market, by setting up a national level electronic spot market and
providing a state of art trading, delivery and settlement facilities in various commodities, which can be accessed from
across the country.
National Spot Exchange is also collaborating with National Bulk Handling Corporation Ltd (NBHC). NBHC was setup
to provide state of the art bulk-storage and handling facilities to agricultural commodities.
WebSite:www.nationalspotexchange.com
4: How to choose a broker?
A commodity demat account can be created exactly in the same manner as an equity demat account. The prices are
also closer to the spot market, as the settlement is made taking the day's prevailing price into account (Tuesday).
The advantage of transacting in demat gold lies in the fact that both buying and selling, in this process, are
convenient, as compared to purchasing gold from a bank, in which case it cannot be sold back to the bank.
Several already-established equity brokers have sought membership with NCDEX and MCX. The likes of Refco Sify
Securities, SSKI (Sharekhan) and ICICIcommtrade (ICICIdirect), ISJ Comdesk (ISJ Securities) and Sunidhi
Consultancy are already offering commodity futures services. Some of them also offer trading through Internet just
like the way they offer equities. You can also get a list of more members from the respective exchanges and decide
upon the broker you want to choose from.
5: Where do you look for information on commodities?
The best way to get the information of commodity is website. We are giving you a platform to get daily live status of
bullion and forex market and opinion of peoples in format of Message board.
Daily financial newspapers carry spot prices and relevant news and articles on most commodities. Besides, there are
specialised magazines on agricultural commodities and metals available for subscription. Brokers also provide
research and analysis suppo
