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Commodity Futures trading

Posted by : NIFM
2 September, 2013, 4:30 PM
In India there is a controller under ministry of consumer affairs known as Forward Market Commission (FMC) for better management and transparency in trading of different commodities. FMC have given permissions to different national and regional stock exchanges for future trading of all listed commodities. The purpose for establishment of these exchanges is to get the fair and actual prices of different products and minimize the risk of exporters, traders and also helps the farmers. In India trading in future and forward market of commodities are in early stage because commodity exchanges had setup their operation only 10 years back. There are 16 Regional and 5 national levels commodity exchanges in India and maximum trading happens only on two national exchanges -Multy Commodity Exchange and National Commodity & derivatiovate exchange (NCDEX) these two exchanges have the maximum ratio for commodity trading. These exchanges provide the trading platform for future and forward trading in different agri products, energy products, base matels, preciouse metals. The benefit for trading in future market is that traders can do trading with small amount rather then paying full amount of derivative value and this margin money could be 5 - 10% of total value if trader opted for delivery on his transaction then have to pay the full value of his trade.


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