Most frequent questions and answers
A commodity market is a physical or virtual marketplace for buying, selling, and trading raw or primary products.
A commodity is a group of assets/goods that are important in everyday life, such as food, energy or metals.
There are six major commodity trading exchanges in India as listed below.
• Multi Commodity Exchange – MCX
• National Commodity and Derivatives Exchange – NCDEX
• National Multi Commodity Exchange – NMCE
• Indian Commodity Exchange – ICEX
• Ace Derivatives Exchange – ACE
• The Universal Commodity Exchange – UCX
The Multi Commodity Exchange of India Limited (MCX), India’s first listed exchange. MCX offers options trading in bullions and precious metals like gold and silver
The National Commodities and Derivatives Exchange (NCDEX) is a commodities exchange established in 2003. NCDEX offers options trading of agri-based products like oil and oil seeds, cereals, etc.
The spot market is where financial instruments, such as commodities, currencies and securities, are traded for immediate delivery.
A futures contract, is based on the delivery of the underlying asset at a future date.
Over-the-counter (OTC) refers to the process of how securities are traded for companies that are not listed on a formal exchange.
Hedging is the process through which you can protects your finances from a risky situation. It minimizes or offset the chance that your assets will lose value and limits your loss.
Speculation involves trading a financial instrument involving high risk, in expectation of significant returns. The motive is to take maximum advantage from fluctuations in the market.
Market arbitrage refers to purchasing and selling the same security at the same time in different markets to take advantage of a price difference between the two separate markets.
Mark-to-market (MTM) is an accounting method that records the value of an asset according to its current market price.