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AGDP Agricultural Gross Domestic Product.

AGMARK: Agricultural Marking.

Arbitrage: 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.


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Backwardation: 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 excessive volatility.

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.


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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 futures.

Close out price: Close out price is the rate at which settlement of short delivery of commodities is completed.

Closing Price: The price at the end of the day's trading on a commodity market.

Commodity: 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 the warehouse.

Commodity exchange: 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.

Contango: Market scenario when the forward price of a commodity is higher than the spot price.

Convergence: 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 of India

CIF - Cost, Insurance & Freight


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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.


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F.A.O . - Food and Agriculture Organisation

FCI - Food Corporation of India

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.

FREIGHTEX: Freightex 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: Futexagri is an equal- weighted index of commodities traded on NCDEX based on the price of near month future contracts.

Futures contract: 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.


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GDP - Gross Domestic Product

GNP - Gross National Product


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IFFCO: Indian Farmers Fertiliser Cooperative Limited.

ISIN: ISIN is the Commodity Identification Number by which each commodity along with its specific details is uniquely represented.  


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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 Corporation Bank.

MSCCGMF - Maharashtra State Co-operative Cotton Growers Marketing Federation.  

MSP - Minimum Support Prices.


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NABARD: National 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.

NCDEX: National 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: 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 Product


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Offer price: Lowest price at which a dealer is willing to sell a commodity.

OCEIL: Online Commodity Exchange India Ltd. is a national multi-commodity exchange located at Ahmedabad.

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.


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PDS: Public Distribution System.

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 process .


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Rally:  A considerable rise in the value of a commodity market after a decline.


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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.


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Trade date: The date on which a trade is executed for a specified value date  


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Unique Client Code: This code is allotted to all members of exchange that will tell you about all details of clients.


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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.

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