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In the present scenario commodity futures
trading has been allowed in 103 commodities. This trading is being conducted via
the three national commodity exchanges being:
-National Commodity and Derivatives Exchange Limited
-Multi Commodity Exchange of India Limited
-National Multi Commodity Exchange of India Limited
Besides the three primary ones listed above, there about 23 listed regional
commodity futures trading exchanges.
During the fiscal year 2005-2006, the Government sanctioned the futures trading
of the following additional commodities:
-Furnace Oil
-Crude Oil
-Mentha Oil
-PVC
-Polypropylene
-Natural Gas
Ever since the lift of the ban in 2003, the aggregate value of commodity futures
trading has been showing a staggering annual increase. Whether futures trading
or volume of trade, both have seemed to reap a growth of over 200 per cent, per
annum.
In keeping with the pace of growth and development in the area of futures
commodity trading, the Government introduced the Forward Contracts (Regulation)
Amendment Bill, in the Lok Sabha session of March 2006. This seemed to be a
relief measure for the traders and others involved in futures trading of
commodities.
Just as it happens in other markets, the commodity futures trading market also
plays an essential role in collecting information and sharing risks. The
exchanges or markets play the role of mediator between those buying and selling
commodities. The exchanges also help making vital decisions with regards to the
consumption as well as storage of commodities.
Today, commodity futures trading has become so much more convenient because of
the online facilities. In fact many have made futures trading a side business to
add to their income. They could be working somewhere and yet trading online. Or
then even conduct commodity trading from the confines of their homes. The other
option is to sign up with a commodity broker or brokerage firm.
To begin commodity futures trading one essentially requires a bank account.
Along with this they will have to open a commodity ‘demat’ account with the
National Securities Depository Limited. This is so as to enable them to trade on
the National Commodity and Derivatives Exchange Limited (NCDEX). Likewise, the
other two national exchanges and the 23 existing regional exchanges have their
own requirements to be met by traders and brokers.
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