NCDEX Commodity Index
Encyclopedia
The NCDEX Commodity Index is an equal-weighted spot price
index of 20 agricultural commodities convering different groups such as oils and oilseeds, fibres, etc.
It is the first such index to be launched in India
. Based on the components of the spot price index, NCDEX also displays the national index futures- essentially, the no-arbitrage
price if one were to buy futures on the spot index. This price is derived by tracking the futures prices of the index components at the same weightage as the spot index. Currently, index futures are not allowed in India under the FCRA (Forward Contracts Regulation Act, 1952), which requires compulsory physical settlement of futures contracts.
Spot price
The spot price or spot rate of a commodity, a security or a currency is the price that is quoted for immediate settlement . Spot settlement is normally one or two business days from trade date...
index of 20 agricultural commodities convering different groups such as oils and oilseeds, fibres, etc.
It is the first such index to be launched in India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
. Based on the components of the spot price index, NCDEX also displays the national index futures- essentially, the no-arbitrage
Arbitrage
In economics and finance, arbitrage is the practice of taking advantage of a price difference between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices...
price if one were to buy futures on the spot index. This price is derived by tracking the futures prices of the index components at the same weightage as the spot index. Currently, index futures are not allowed in India under the FCRA (Forward Contracts Regulation Act, 1952), which requires compulsory physical settlement of futures contracts.