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National Commodity & Derivatives Exchange Limited (NCDEX) is an Indian online commodity and derivative exchange based in India. It has an independent board of directors and provides a commodity exchange platform for market participants to trade in commodity derivatives. It is an online technology-driven trading exchange.
The NCDEX Commodity Index is an equal-weighted spot price index of 10 agricultural commodities covering different goods such as oils and oilseeds, fibres, etc. It is the first such index to be launched in India .
Hedge funds focused on commodities have generated strong returns in 2021 and investors long wary of such funds are now putting money into them, betting the recovery from the pandemic will charge ...
The value of these indexes fluctuates based on their underlying commodities, and this value can be traded on an exchange in much the same way as stock index futures. Investors can choose to obtain a passive exposure to these commodity price indices through a total return swap or a commodity index fund .
Commodity trading in India has a long history. In fact, commodity trading in India started much before it started in many other countries. However, years of foreign rule , droughts and periods of scarcity and government policies caused the commodity trading in India to diminish.
Because it derives its value from the value of the underlying asset, a futures contract is a derivative. Contracts are traded at futures exchanges, which act as a marketplace between buyers and sellers. The buyer of a contract is said to be the long position holder and the selling party is said to be the short position holder. [1]
This may be due to people's desire to pay a premium to have the commodity in the future rather than paying the costs of storage and carry costs of buying the commodity today." [2] [3] On the other side of the trade, hedgers (commodity producers and commodity holders) are happy to sell futures contracts and accept the higher-than-expected returns.
Rashtriya e-Market Services (ReMS) is established as a joint venture of Government of Karnataka (India) and NCDEX spot exchange limited with equal shareholding. It was conceived to blend public interest with the initiative of a private enterprise for establishing, operating, managing a specialized electronic trading platform called Unified Market Platform (UMP) for auctioning of farmer's produce.