National Commodity & Derivatives Exchange or NCDEX – Know Everything

NCDEX or National Commodity & Derivatives Exchange plays a significant role in boosting the agricultural economy of the country.

Since India is a leading global producer of agricultural commodities like rice, wheat, sugar, etc., NCDEX facilitates the international trading of these commodities.

In this process, farmers are able to sell their produce at a contract price at a specific time. So they do not need to worry about any losses related to price fluctuations in the economy.


What is National Commodities and Derivatives Exchange?

NCDEX is an online Commodity Stock Exchange. This exchange deals primarily with agricultural commodities.

All the transactions come under the regulation of the Securities and Exchange Board of India. The NCDEX was established in 2003 with its headquarters in Mumbai.

It has a vast network of branches spread across the country, the major branches being in Delhi, Kolkata, Hyderabad, and Jaipur.

Through this network of branches and warehouses, the exchange helps the traders and farmers get the value for their commodities.

In order to ensure a hassle-free experience, the exchange has state of the art technology infrastructure. All the electronic transactions are conducted in a seamless manner by lakhs of participants!


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    Commodities Traded on NCDEX

    Below is the list of agricultural commodities which are primarily traded on the NCDEX:

    • Fibers: Kapas and cotton
    • Cereals: Barley, maize, wheat, paddy
    • Pulses: Chana, Moong
    • Oils and seeds: castor, soybean, mustard, crude palm oil
    • Sugar
    • Spices: Turmeric, coriander, jeera

    Benefits of NCDEX

    Here are list of benefits of National Commodity & Derivative Exchange –

    • Helps increase market transparency
    • Assists the farmers in India in the price discovery process
    • Eliminates all unnecessary middlemen, and their related costs
    • Reduces cost of price data for the farmers
    • Help introduce standardization, thereby improving agricultural practices
    • Raises quality awareness amongst farmers
    • Boost overall productivity and exports in the agricultural sector

    How to open an NCDEX Account?

    Here is a step by step process to open an NCDEX Account –

    Select a Commodity Broker – This can be a tricky decision. You need to check the UI, app features, charges and benefits provided by different commodity stock brokers.

    Then only you can arrive at the right decision. Your broker acts as an intermediary between you and the exchange. In order to have good trading experience, it is essential to choose the right stockbroker.

    Fill the application form – Fill up the demat account form available above & we will connect you with the best commodity broker.

    Verification of Details – Once the application form is filled up, you will get a call & they will ask for few details like aadhaar, pan & cancelled cheque. Then they will verify the details.

    Depositing of margin requirements – Once the account is opened, you will have to add Margin in your commodity account which you will use for trading.

    Start Trading – You can now, login to your trading platform or trading app & start trading in commodities.


    Top NCDEX Brokers

    Following is the list of top NCDEX brokers you can choose from for creating your trading and Demat account with:

    1. Zerodha
    2. Angel broking
    3. Sharekhan
    4. Edelweiss
    5. Upstox

    The brokerage charges vary for different brokers. While choosing the broker, you need to check the brokerage charged and maintenance charges charged by them.

    There are three positions which a trader can assume in the market:

    1. The long trader can stay in the market and use the commodity as a position to earn profits, or he can even choose to get physical delivery of the said commodity from the warehouse.
    2. The short trader, on the other hand, can square off their position or deliver the commodity to the warehouse.
    3. Traders who wish to hedge and earn profits can assume either of the above two positions. Hedging works better in equity markets.

    Important points related to trading in NCDEX

    • Since the market works in real-time and the prices can fluctuate easily, the exchange works on a mark-to-market settlement basis.
    • Types of orders on NCDEX are day order, IOC order, Good till Date, and Good till Days.
    • The users can place a stop loss- either a market stop loss or a limit stop loss.

    Trading in Commodity Futures and Options on NCDEX:

    The prices of agricultural commodities are prone to fluctuations because of changes in the market. The poverty-stricken conditions of the farmers make the situation worse.

    Farmers do not have any price regulations, transportation, storage facilities, and no price realization facilities. Thus, a need for a futures market was felt very strongly!

    NCDEX plays a major role in this. It acts as a robust market platform that can determine the prices of agricultural commodities.

    Through this price discovery method, the farmers can enjoy the benefits of correct price determination without even being actively involved in the market.

    NCDEX also plays a major role in ensuring quality checks for various crop productions. Because of these strong binding contracts created by the NCDEX, the farmers in India are spending more time in meeting testing requirements.


    Timings of National Commodity & Derivative Exchange

    The national commodities and derivatives exchange operates from Monday to Friday. The operative timings are from 10:00 am to 11:30 pm.

    All the traders can check the real time status of different commodities using different apps.


    National Commodities and Derivatives Exchange App

    The national commodities and derivatives exchange released its online app. Through this app, users can track price movements, news, updates, and everything else related to the commodity market on a real-time basis.

    The app has been developed using the best technologies and is very easy to use. The traders can manage their portfolio and watch the market easily using this app.

    The NCDEX app is available for easy download from the Google play store itself.


    NCDEX Profit and Loss Calculator

    Brokerage: The brokerage depends on the broker chosen. While some discount brokers charge a flat brokerage per trade, others use a percentage basis.

    Gross profit = (Sold price of the commodity – bought price)* Lot size

    Net Profit = Gross Profit – Brokerage


    Conclusion: NCDEX

    NCDEX is the second-largest exchange in terms of volume of trade handled. It is playing a major role in giving the agricultural sector a boost in the economy.

    However, agriculture in India is still very backward and needs a lot of upliftment from the authorities.

    A well-regulated futures market can prove to be very beneficial in ensuring the overall growth of this sector.

    The authorities need to join hands and unleash the potential of growth India exhibits for trade in the agricultural commodities sector.

    The NCDEX needs to be used wisely as a platform for the overall development of the country, and not just as an exchange.


    Open a Commodity Demat & Trading Account Now! – Fill up the Form

      Fill Your Details Here
      1. Open Demat Account

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