The National Commodity and Derivatives Exchange (NCDEX) on Tuesday launched Agri Futures Index, which traded a total of 418 lots and Rs 21 crore volume on the first day.
Agri Futures Index (Agridex) traded 102 lots with around Rs 5 crore volume at around 1130 hours, NCDEX said in a statement.
With a base value of 1,000, Agridex will be available initially for trading of contracts expiring in June, July, September and December.
The cash-settled agri index has 10 leading liquid contracts including soybean, chana, coriander, cottonseed oil cake, guargum, guar seed, mustard seed, refined soy oil, castor seed and jeera.
The value of this index is generated based on the spot and futures of the underlying commodities.
Agridex is a return-based index with commodity and sector wise floors and caps, with no single commodity or sector dominating the index.
“Agridex brings to the market participants the power of common sense. To trade in individual commodities, one needs to research that commodity. But to trade on an index, only a general directional view is needed. The equity market participants are aware of it, but in the commodity market it was missing. Now with the launch of Agridex, this gap has been filled,” NCDEX MD and CEO Vijay Kumar told reporters in a webinar.
This index will represent various underlying assets covering agricultural commodities of both kharif (summer) and rabi (winter) seasons, with price reference round the year, he said adding that Agridex will help all classes of participants hedge their commodities” risk based on price anticipation of the products.
Agridex has been framed based on the revised guidelines issued by the Securities and Exchange Board of India (Sebi), which allowed futures trading in commodity indices recently.
“We hope that this will pave the path of other potential indexes too, depending on market requirements,” Kumar said.
Agridex will be able to attract vast types and numbers of market participants ranging from FPOs, farmers, traders retail, institutional players, among others so that they can trade efficiently due to its diversified composition, its return-based rollover and cash settlement process, NCDEX CFO Atul Roongta added. PTI