About Commodity Derivatives

Commodity Derivatives markets are a good source of critical information and indicator of market sentiments. Since, commodities are frequently used as input in the production of goods or services, uncertainty and volatility in commodity prices and raw materials makes the business environment erratic, unpredictable and subject to unforeseeable risks.

Volatility in raw material costs affects businesses and can be significant given that commodity prices are driven by supply and demand from domestics as well as global markets. Ability to manage or mitigate risks by using suitable hedging in commodity derivative products, can positively affect business performance. Futures & Options, are by far the most common Commodity Derivatives products offered on an Exchange, that are well structured and regulated through robust mechanisms and controls.

The National Stock Exchange of India Limited (NSE) commenced trading in Commodity Derivatives with the launch of bullion futures on October 12, 2018. For 25 years, we shaped the equity market. We launched the Derivatives contracts on the popular benchmark Nifty 50 Index in June 2000. NSE has now embarked a journey to shape the commodity market, with the introduction of futures on Commodity Derivatives.

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The higher the Percent of Deliverable Quantity to Traded Quantity the better - it indicates that most buyers are expecting the price of the share to go up.

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