Answer: National Commodities And Derivatives Exchange.India's largest and most recognized commodities exchange, which was established in 2003. The exchange was founded by some of India's leading financial institutions such as ICICI Bank Limited, the National Stock Exchange of India and the National Bank for Agricultural and Rural Development, among others.he exchange is located in Mumbai, but has offices across the country to facilitate trade. Trading is done on 45 commodities that are integral to India's economy. These include gold, silver, Brent Crude oil, and rice, along with other agricultural products and base metals.
More and more stock brokers are setting up commodity brokerages as well, and trading volumes in commodity futures is widely predicted to rival the volume of derivative transactions (futures and options) on the stock exchanges.
When you buy a Gold Futures contract, you undertake to do three things.
1. Buy the amount of gold specified in the contract.
2. Buy it at the price specified in the contract.
3. Buy it on the expiry of the contract. This could be after one month, two months, three months and so on. Of course, if you sell the Gold Futures contract before it expires, then you don't have to worry about actually buying the gold.
Let's say you buy the Gold Future contract at say Rs 7,200 per 10 gm.
Your hunch comes true and the gold prices rally to Rs 8,000 per 10 gm.
You can sell the Gold Futures any time before expiry of the contract.
Gold and other commodity futures prices are quoted on the commodity exchanges in exactly the same way in which stock prices or stock futures prices are quoted on a daily basis in the stock markets.
How it works
Just like stock futures (Read How to trade in Futures to understand how futures work).
When you buy a Futures, you don't have to pay the entire amount, just a fixed percentage of the cost. This is known as the margin.
Let's say you are buying a Gold Futures contract. The minimum contract size for a gold future is 100 gms. 100 gms of gold may be worth Rs 72,000.
The margin for gold set by MCX is 3.5%. So you only end up paying Rs 2,520.
The low margin means that you can buy futures representing a large amount of gold by paying only a fraction of the price.
So you bought the Gold Futures contract when it was Rs 72,000 per 100 gms.
The next day, the price of gold rose to Rs 73,000 per 100 gms.
Rs 1,000 (Rs 73,000 Rs 72,000) will be credited to your account.
The following day, the price dips to Rs 72,500.
Rs 500 will get debited from your account (Rs 73,000 - Rs 72,500).
One should go into the commodities trading exchange - NCDEX and MCX - to see which commodities are offered for trading, their contract size and other criteria. You will have to get hold of a commodities broker but that should not be a problem. There are lots of brokers that offer commodity trading these days.
But, it would be wise to avoid commodity trading if you are a rookie. A better move would be to initially trade in stock futures before opting for commodity futures.
One can go on this link for online updated price list and exchange rates:
http://www.ncdex.com/HomeAction_input.action