Equity V/S Commodity: Major Commodity Exchanges in India and Regulatory Bodies


When venturing into the exciting world of commodity trading in India, it is essential to equip oneself with the necessary knowledge and tools for success. From identifying the best commodity shares to buy in India to selecting the most reliable commodity trading brokers, making informed decisions is crucial. This blog concentrates on popular doubts about equity and commodity derivatives. Further, the focus shifts to the commodity market exclusively.

To embark on this journey, one can start by opening an online commodity trading account in India. It provides a convenient and accessible platform to engage in commodity trading. You can open a commodity trading account with Goodwill and get the best services offered by our panel of experts. By leveraging our expertise and conducting thorough research, investors can navigate the market to discover the best commodity shares. Optimize your trading strategies, and seize profitable opportunities.

Difference between equity derivatives and commodity derivatives

Equity derivatives and commodity derivatives are two distinct categories of financial instruments. Equity derivatives are linked to the value of underlying stocks or equity securities. These derivatives, such as options and futures, allow investors to speculate on the price movements of individual stocks or the broader stock market indices. They provide opportunities for hedging, leveraging, and taking positions on the future value of equities.

Commodity derivatives are tied to the prices of physical commodities. For example, metals, energy resources, agricultural products, and other raw materials. These derivatives enable participants to manage the price risk associated with these commodities. Commodity derivatives include futures contracts, options, swaps, and commodity-based exchange-traded funds (ETFs). Its trade is based on the underlying commodity’s price. They provide exposure to the commodity market without owning the physical assets.

The key distinction between equity derivatives and commodity derivatives lies in the underlying assets. Equity derivatives are based on stocks. Commodity derivatives are based on physical commodities.

The dynamics of these markets also differ. Factors such as company performance, market sentiment, and economic conditions affect Equity derivatives. Supply and demand dynamics, weather, geopolitical, and global economic trends impact Commodity derivatives.

The trading patterns and participants in equity derivatives and commodity derivatives markets differ. Equity derivatives are traded by institutional investors, hedge funds, and retail traders in established stock exchanges. Producers, consumers, speculators, and investors in specialized commodity exchanges or over-the-counter markets trade on Commodity derivatives.

Difference between commodity exchange and stock exchange

Commodity Exchange:

Commodity exchanges and stock exchanges serve different purposes. A commodity exchange deals with the trading of physical commodities. For example, agricultural products, metals, and energy resources. These exchanges provide a platform for buyers and sellers to trade standardized contracts. Market forces determine the prices.

Stock Exchange: 

A stock exchange facilitates the buying and selling of securities. It particularly includes stocks or shares of publicly traded companies. Investors trade these securities. It thus enables companies to raise capital and individuals to invest in businesses. The stock market focuses on ownership rights and the value of companies. Factors such as company performance, market sentiment, and economic indicators influence the price.

Commodity exchanges revolve around the physical trading of standardized commodities. Stock exchanges revolve around the buying and selling of securities and ownership stakes in companies.

Commodity operates during specific trading hours. The stock exchange is heavily regulated and operates during regular business hours. To get more ideas on commodity trading and strategies, go through our previous blogs.

How many commodity exchanges are there in India?

India has several commodity exchanges where the trading of various commodities takes place. There are three major commodity exchanges in India. They are:

Multi Commodity Exchange (MCX): 

MCX is the largest and most popular commodity exchange in India. It offers trading various commodities. For example, metals like gold, silver, copper, and base metals. Agricultural products like crude palm oil, cotton, and spices. Energy products like crude oil and natural gas, and various other commodities.

National Commodity and Derivatives Exchange (NCDEX): 

NCDEX is another significant commodity exchange in India. It focuses on agricultural commodities and offers to trade in pulses, oils, spices, wheat, maize, soybean, chana(gram), guar seed, etc. NCDEX provides a platform for farmers, traders, and market participants to hedge their price risks and take part in the agricultural commodity markets.

Indian Commodity Exchange (ICEX):

ICEX mainly deals with the trading of diamonds, gold contracts, and other precious stones. It offers the world’s first diamond futures contracts. ICEX provides a transparent and regulated platform for participants to trade and hedge their exposure to the diamond market.

These three commodity exchanges play a vital role in facilitating the trading of various commodities and derivatives in India. It caters to the needs of different market participants and investors. These exchanges are the major ones. There may be other smaller or specialized commodity exchanges operating in India as well.

Differences Between Commodity Exchanges

Product Offerings: 

MCX offers a wide range of commodities. It includes metals, energy products, agricultural products, and more. NCDEX focuses on agricultural commodities. ICEX specializes in trading diamonds and other precious stones.

Trading Sessions: 

MCX, NCDEX, and ICEX have both morning and evening trading sessions.

Trading Time Slots: 

MCX, NCDEX, and ICEX have specific time slots within their trading sessions for different commodity groups.

Market Dominance: 

MCX is the largest and most popular commodity exchange in India, followed by NCDEX. ICEX is a relatively newer exchange and specializes in a niche segment of trading diamonds.

These differences reflect the varying market focus, trading hours, and product offerings of each exchange. It caters to the diverse needs of traders and investors in different commodity sectors.

The Trading Sessions of Commodity Exchanges

The trade timings of the major commodity exchanges in India are as follows:

Multi Commodity Exchange (MCX): 

MCX operates from Monday to Friday and has two trading sessions:

a. Trading Session: The session starts at 9:00 a.m. and continues until 11:30 p.m. This session is further divided into different time slots for different commodity groups. For example, metals, energy, and bullion.

b. The trading session for Agri-commodities continues till 5:00 p.m.

National Commodity and Derivatives Exchange (NCDEX): 

NCDEX also operates from Monday to Friday and has two trading sessions:

The sessions are divided into different time slots for different commodity groups, such as agricultural commodities.

a. Commodity Group 1: The morning session for Crude Palm Oil, Kapas, Cotton, Soy Oil, and NCDEX AGRIDEX starts at 9:00 a.m and continues until 9:00 p.m.

b. All other Agri Commodities have a session that starts from 9:00 a.m to 5:00 p.m.

The Pre-Open session is from 8:45 a.m to 9:00 a.m for every commodity.

Indian Commodity Exchange (ICEX):

ICEX operates from Monday to Friday and has two trading sessions:

a. Trading Session: The trading session starts at 9:00 a.m. and continues until 5:00 p.m for the trading of Agri-commodities.

b. The Non-Agri Commodities are traded from 9:00 a.m. to 11:30 P.M/11:55 p.m.

It will be useful to use a brokerage calculator during trading sessions to check your fees. Make the best use of Goodwill’s commodity brokerage calculator. It is the most accurate and updated calculator available.

Who regulates the commodity market in India?

The Securities and Exchange Board of India (SEBI) does the regulation of the commodity market in India. It includes futures and options trading in commodities. SEBI ensures transparency, fairness, and investor protection. It has the authority to regulate and supervise commodity exchanges, their operations, and participants involved in commodity trading. SEBI sets rules, regulations, and guidelines for the functioning of commodity exchanges. Also ensures compliance with the established norms. Yet, the regulatory landscape for commodity markets has changed.

In 2015, the Forward Markets Commission (FMC) was merged with SEBI. It brought the regulation of commodity markets under SEBI’s purview. Before this merger, the FMC was the regulatory authority dedicated to overseeing the commodity market in India. With the consolidation, SEBI now plays a comprehensive role. It regulates both securities markets and commodity derivative markets in the country. It regulates commodity exchanges, brokers, traders, and other market intermediaries operating in the commodity market. Additionally, the Ministry of Consumer Affairs, Food, and Public Distribution regulates the trading of certain commodities. It includes rice, wheat, and sugar, under the Essential Commodities Act. SEBI plays a crucial role in the regulation of the commodity market in India. It ensures that the market functions in a fair and transparent manner.


India offers a multitude of opportunities for individuals investing in the commodity market. Conduct thorough research and analysis to identify the best commodity shares to buy in India. This article analyzed the differences between equity and commodity derivatives, and differences between their exchange platforms. Also, the commodity trading exchanges, trading sessions, and the regulatory authority.

Why Goodwill?

Open an online commodity trading account in India with Goodwill and get all the benefits of leveraging and less brokerage. It is a convenient and hassle-free way to start trading in commodities. Opening an online commodity trading account in India provides convenience, flexibility, and accessibility. Also helps engage in commodity trading activities from any place.  It is crucial to identify the best commodity trading brokers in the country like Goodwill.

By leveraging the services of top-notch brokers and utilizing online platforms, investors can make informed decisions. Capitalize on the opportunities presented by the Indian commodity market. Goodwill gives research-based advice for commodity markets. If you already have equity or f&o account at Goodwill, you can get an extended benefit to open commodity account. Open with the same deposit amount without additional KYC document submission.

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