AGDP – Agricultural Gross
Simultaneous buying and selling of the same asset in different markets in order
to capitalize on variations in price between those markets .
Ask price: Lowest price
at which a dealer is willing to sell a commodity.
Assayer: Assayer is an
authorized entity (person/institution) that certifies and grades the commodities
that are delivered in exchange accredited warehouses.
In futures market, when a commodity is in shortage, causing near month contract
to sell at a premium and distant month contract to sell at a discount i.e. spot
price of the commodity is higher than the forward price.
Bandhani: An Indian form
of trading in which the contract price is not allowed to go beyond floor and ceiling
prices, set on the first day, throughout the life of the contract, thus restricting
Basis: Basis is price difference
between a cash contract and a futures contract.
Beneficiary Account: A
beneficiary account is a Demat account in the name of an Individual (single or jointly).
Such an account could also be in the name of a Corporate, a partnership firm, a
society and a trust. It is similar to a bank account. This account is to be used
for transacting in commodity balances held by the account holder at Exchange accredited
warehouses. These commodity balances would have been – in a physical process set
up – represented through a warehouse receipt.
Bid Price: The highest
price at which a dealer is willing to buy commodities .
Bid – Offer/Ask spread:
The difference between the price at which a dealer is willing to buy ( Bid ) and
sell ( Offer/Ask ) a commodity . Bid will be lower of the two prices
and offer price the higher. Also known as impact cost.
BIS: Bureau of Indian Standards.
Bullion: The generic
word for gold and silver.
Buying forward: Buying
commodities at a specified price for delivery at a future date.
Cash commodity: The actual
physical product on which a futures contract is based. This product can include
agricultural commodities, financial instruments and the cash equivalents of index
Close out price:
Close out price is the rate at which settlement of short delivery of commodities
Closing Price: The price
at the end of the day's trading on a commodity market.
A physical substance, such as food, grains, and metals, which is interchangeable
with other products of the same type.
Commodity Deposit Form (CDF):
The client has to fill up the Commodity Deposit Form (CDF) and submit the same to
the warehouse along with the assayer's report after which the assayer gives a report
of the quality of the commodities .The Commodity Deposit Form is available with
A commodity exchange is an association, or a company or any other body corporate
organizing futures trading in commodities.
Commodity spreads (or straddles):
Commodity spreads measure the price difference between two different contracts,
usually futures contracts.
scenario when the forward price of a commodity is higher than the spot price.
The tendency of difference between spot and futures contract to decline continuously,
so as to become zero on the date of maturity.
CCI - Cotton Corporation
CIF - Cost, Insurance
Delivery: The tender and
receipt of the actual commodity or in the case of agricultural commodities, warehouse
receipts covering such commodity, in settlement of a futures contract. Some contracts
settle in cash (cash delivery), in which case open positions are marked to market
on the last day of the contract based on the cash market close.
Delivery date: The
day in the month that commodities on a futures contract have to be delivered.
Delivery month: Specified
month within which delivery may be made under the terms of a futures contract.
Delivery notice: A notice
of a clearing member's intention to deliver a stated quantity of a commodity in
settlement of a short futures position.
F.A.O . -
Food and Agriculture Organisation
FCI - Food Corporation
FMC: Forward Market
Commission is the Regulatory Authority in India for commodity futures trading.
Forward price: The
fixed price at which a specified amount of a commodity is to be delivered on a fixed
date in the future.
is an index on NCDEX that represents simple average of the freight rates per tonne
across high-density routes for a distance of 1000 kilometers.
Futexagri is an equal- weighted index of commodities traded on NCDEX based on the
price of near month future contracts.
An agreement to buy or sell a fixed quantity of a specified commodity ,
for delivery at a fixed date in the future at a fixed price. Futures contracts
are standardised agreements traded on Futures Exchanges.
GDP - Gross Domestic
GNP - Gross National
COUNCIL OF AGRICULTURAL RESEARCH.
IFFCO: Indian Farmers
Fertiliser Cooperative Limited.
ISIN is the Commodity Identification Number by which each commodity along with its
specific details is uniquely represented.
MCX: Multi Commodity Exchange
of India is a de-mutualised online commodity exchange of India promoted by Financial
Technologies (I) Ltd, SBI, Fidelity International, NSE, NABARD, HDFC Bk, SBI Life
Insurance Co., Union Bank of India, Canara Bk, Bank of India, Bank of Baroda and
MSCCGMF - Maharashtra
State Co-operative Cotton Growers Marketing Federation.
MSP - Minimum Support
Bank for Agriculture and Rural Development.
NAFED - National
Agricultural Co-operative Marketing Federation of India Limited.
NBOT: National Board of
Trade (NBOT) is a national multi-commodity exchange located at Indore.
Commodity and Derivative Exchange of India is a de-mutualised online commodity exchange
of India promoted by NSE, ICICI Bk, LIC, PNB, CRISIL, NABARD IFFCO and Canara Bk.
NCDEXRAIN is a rainfall index of NCDEX which tell us what percentage of cumulative
normal expected rainfall (till the date of the index) it has actually rained taking
into consideration average actual rainfall at both Colaba and Santa Cruz weather
stations in Mumbai.
NMCE: National Multi
Commodity Exchange is the first De-Mutualised Electronic Multi-Commodity Exchange
of India located at Ahmedabad was granted the National status on a permanent basis
by the Government of India and operational since 26th November 2002.
NNP - Net National
Offer price: Lowest
price at which a dealer is willing to sell a commodity.
Commodity Exchange India Ltd. is a national multi-commodity exchange located at
Open interest: The
number of open or outstanding contracts on a commodity exchange for which the holders
are still obligated to the commodity exchange concerned. No offsetting sale or purchase
has yet been made against it. Open interest is used as an indicator of the level
of commercial activity in a particular futures contract.
Open position: A long or
short trading position that is not yet closed.
PDS: Public Distribution
Pool Account:? Member
pool account is a Demat account opened by Trading Members and / or Clearing Members
of commodity exchanges. This account is opened to facilitate the pay-in and payout
Rally: A considerable
rise in the value of a commodity market after a decline.
Short position: Position
resulting from a short selling strategy.
Short selling: A
strategy in which a speculator sells a commodity that he or she does not own in
order to profit from a falling market. The speculator will borrow the commodity
from a third party and then immediately sell on to the buyer .
Speculator: A trader
who takes an outright long or short position in the market.
Spot market: A market in
which commodities are bought and sold for cash and immediate delivery.
Spread: The difference
between current bid and offer ( ask ) prices for a commodity.
Settlement date: The date on which a contract must be fully paid for and delivered.
Settlement price: In futures markets, the price that is set by the exchange at
the end of each trading day and which is used by the clearing house to market open
positions and assess margin calls.
Trade date: The date
on which a trade is executed for a specified value date
Unique Client Code: This
code is allotted to all members of exchange that will tell you about all details
Warehouse receipt: A warehouse or depository receipt is issued when delivery takes
place on a commodity exchange. It specifies the grade and quantity of commodities.