Archive for October, 2011

Multi-Commodity Exchange and types of commodities

Commodity market is where raw and primary products are sold and bought. These commodities product are regularly traded where they are sold and bought within a contract. Trading in commodities began in Japan in the 18th century with the trading of rice and silk. Organized commodity derivatives started in India early as 1875. Trading in the US began in the 1957 century.

There are two types of exchanges in commodity market-

1. MCX (Multi Commodity Exchange)

2. NCDEX (National Commodity and Derivatives Exchange)

MCX stands for multi commodity exchange. This is India based commodity exchange market. MCX headquarter establishes in 2003 in Mumbai. Multi commodity Exchange is India’s number one commodity exchange and its offers more than 40 commodities for trading. MCX covers the three types of assets-

1. Energy:- WTI crude oil, Brent Crude, Ethanol, Natural Gas, Heating Oil, Gulf Coast Gasoline, Uranium etc.

2. Base metal:- Copper, Lead, Zinc, Tin, Aluminum, Nickel, Aluminum alloy, Steel etc.

3. Precious metal:- Gold , Platinum, Palladium, Silver etc.

The MCX achieved first rank in Silver, the second rank in Gold, Natural Gas and Copper and achieved third rank in crude oil futures in all over the world. Commodity exchange decides the lots size and base value of different commodities. The MCX trading timing in a week Monday to Friday is 10:00 AM to 11:30 PM and on Saturday its timing is 10:00 AM to 02:00 PM.

Commodity trading is totally future contract based trading and the future market prices are affected by many factors. There are many economic and political factors that are affecting to mcx commodities price. Political factors as like restriction on new businesses, lack of well developed legal system, corruptions affects to market price. During the gulf war in Iraq the oil price changed. Agricultural assets are affected by weather and crops. The demand and supply is directly affected to commodity market price.