NCDEX to launch futures trading on Agridex

Our Bureau Mumbai | Updated on May 20, 2020 Published on May 20, 2020

Vijay Kumar, Managing Director, Ncdex   -  BUSINESS LINE

Four contracts will be available for trading from May 26

The National Commodity and Derivatives Exchange (NCDEX) has launched futures trading on NCDEX Agridex, an agriculture index that seeks to provide a holistic view on various commodities traded on the exchange.

Four contracts expiring in June, July, September and December will be available for trading from May 26.

The return-based index comprises 10 liquid commodities traded on NCDEX. It has commodity-wise and sector-wise floors and caps, with no single commodity or sector dominating the index. Agridex has low correlation with other asset classes and indices. To ensure diversification, no group of related commodities may constitute over 40 per cent of the total weightage in the index.

The rollover in futures contract will be done on the initial three days of the expiry month and the index will be rebalanced annually on the first business day of April.

A floor and a cap are enforced upon the weights of each commodity; besides, sector-specific capping is also done based on the aggregated weight of each sector.

NCDEX has partnered with NSE Indices, an index service provider, to maintain and disseminate real-time NCDEX Agridex values.

Vijay Kumar, Managing Director, NCDEX, said the Agridex futures contracts will provide investors with another tool for trading and risk management at a composite level.

Kapil Dev, Head-Business, NCDEX, said Agridex will be the first tradeable commodity index based on domestic prices.

Since Agridex Futures Contracts provide a diversified cash settled instrument, it will help in widening participation on the exchange from both institutional and retail investors, he added.

Published on May 20, 2020

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
  1. Comments will be moderated by The Hindu Business Line editorial team.
  2. Comments that are abusive, personal, incendiary or irrelevant cannot be published.
  3. Please write complete sentences. Do not type comments in all capital letters, or in all lower case letters, or using abbreviated text. (example: u cannot substitute for you, d is not 'the', n is not 'and').
  4. We may remove hyperlinks within comments.
  5. Please use a genuine email ID and provide your name, to avoid rejection.
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.