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How to open NCDEX Account?
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If you are the one who wants to trade in agricultural products, you must have an idea of how to open NCDEX account.
NCDEX allows you to earn a huge profit while trading in Indian Agricultural products.
But, if you are a newcomer inĀ commodity trading you need to get an idea of each and every aspect of NCDEX.
In this article, we will give you a proper guide that will help you to easily understand the agricultural commodity market in India.
At the end of this article, you will get a clear picture of how to trade and earn a profit by trading in NCDEX.
Also read:Ā How many Stock Exchanges in India?
So, letās start our discussion with the NCDEX Demat account and get a clear picture of commodity market trading.
NCDEX Demat Account
The National Commodities & Derivatives Exchange of India (NCDEX) was established on 30th April 2003 and started its service on December 15, 2003. The headquarter of the exchange is in Mumbai.
The offices of the exchange are available across the country which offers trading services in agricultural commodities to traders and farmers. NCDEX has over 390 centres across the Asian Nations.
Branches that will help you to open an NCDEX trading account are in:
- Kolkata
- Ahmadabad
- Hyderabad
- Indore
- Jaipur
Open NCDEX account to trade and deal with agricultural commodities. Presently, NCDEX allows you to trade in almost 36 agri-commodities which includes Chana, coffee, Chilli, Cereals, wheat, oilseeds, oil, Sugar, etc.Ā
The stakeholders in NCDEX are some of the big financial institutions. Those financial institutions are the National Stock Exchange of India (NSE), Life insurance Corporation of India (LIC), and the National Bank for Rural and Agricultural development bank of India (NABARD).
Currently, NCDEX has a total of 594 warehouses that has a holding capacity of 1.5 million tonnes which helps delivery of commodities easily to the buyers.
So get started with the trade of all the commodities it is good to open the demat account. This helps you to secure your shares in an electronic form and in doing trade without any hassle.
Why Open NCDEX Trading Account?
If you are the one who wants to start trading in NCDEX, the question may come to your mind that why open an NCDEX account? So, here are some of the main reasons which are sufficient to understand the necessity of the NCDEX trading account.
Now a day except NCDEX, NSE and BSE also offer commodity trading facilities to traders. But for now, NCDEX is the leader in the agri-commodity segment.
As we know that India is a leader in producing many crops like Wheat, milk, rice, etc. So, the NCDEX trading account also helps the nation in the growth of agricultural products.
NCDEX also helps in increasing market transparency. Here farmers get the right price of their crops as it helps in reducing the gap between market price and farmers. Thus, brings more transparency.
Above all discussion is just a part of the introduction. But, if you are a beginner in the commodities market, it is not sufficient information for you.
So, letās start our discussion more broadly so that a beginner can easily start trading in NCDEX.
How to Open NCDEX Trading Account?
If you wish to trade in a commodity segment in NCDEX, you will have to open a trading account with the stockbroker you want to trade.
The NCDEX account opening process can be done online nowadays. The process is hassle-free and less time consuming as well. Here are going to discuss the simple 4 steps to open commodity trading account.
As we have discussed above, there are two types of stockbrokers and there are many stockbrokers available in the market.
Now, it totally depends on your choice with which firm you want to do trading in commodities. Each firm has its own benefit and some drawbacks.
If you are confused regarding the selection of the right stockbroker, you can see the various charges levied on the traders by the stockbroking firms.Ā
Here are some of the benefits of choosing the right stockbroker:
- The right stockbroker will help you to select the right commodity so that you can earn more.
- Through messages, they give a timely recommendation of Buy/Sell/Hold the commodity to earn more profit and lose less money.
- The platform fee, brokerage charge, and transaction charge are also less or affordableĀ in comparison to other brokers. Furthermore, if you perform a comparison of Demat Account charges among your preferred stockbrokers, you would find stark differences.
Another thing, while choosing a stockbroker tries to select that broker who is specifically a member of NCDEX.
For commodities trading on NSE and BSE, you have a lot of option as many stockbrokers in India has started commodities trading.
You should know that there are two types of stockbrokers. One is a traditional or full-service stockbroker and another is a Discount Broker.
Full-service Stockbroker: Full-service stockbrokers provides a wide range of services to clients including retirement and planning, research and advice, Tax tips, regular portfolio updates, and many more.
Eg: Angel broking, Indiainfoline, ICICI Securities, Sharekhan, etc.
Discount broker: Discount brokers normally allow clients to trade on their own with little or no interaction with the live broker.
A discount broker is best for those clients who are fee-conscious who prefer to do all by themselves.
Eg: Zerodha, Wisdom Capital, Upstox, etc.
Moving ahead, when you have an idea about the types of stockbrokers in both the categories (full service and discount stockbroker), the next step is to know about the process of filling a form for the NCDEX account opening.
2. Filling the online Application form:
The second step to open an NCDEX trading account is online form fill-up. After selecting the right stockbroker, you need to feel the application form available on the brokerās website.
You need to download the application form and fill all the required details and then submit the same.
You will need to provide address proof and identity proof to complete the process.
Upload all the documents required for the demat account. These documents are further used for verification purposes.
3. Verification
Verification is just like passing an exam. If In-Person verification remains incomplete, your commodity trading account opening process will stop.
After completion of the application form from your side, the company will verify all the information provided by you. If it will be ok, you will get a message at your registered email or mobile number.
4. Deposit margin money
To start trading, you are required to deposit margin money as soon as the account opens.
This margin money is a type of security money from your side to the broker. It means if, at any point in time, you suffer a huge loss you will be able to pay that money.
Generally, the margin money for most of the stockbrokers remains in the range of 5%-10% of the contract value. With the margin money, you will also have to keep some maintenance money in your commodity trading account.
Now, we will discuss the main part of this article. As a beginner, you need to know how to trade in agri-commodities on NCDEX and how to earn a huge profit.Ā So, letās discuss the method of trading on NCDEX.
These are some important points which you should keep in mind while starting commodity trading in NCDEX.
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NCDEX Account Opening Charges
It is very important to know about NCDEX account opening charges. Normally, a trader is supposed to pay account opening and AMC charges to the stockbroker which is charged on an annual basis.
Generally, stockbrokers do not charge anything to open Demat account. However, the charges differ from one broker to another. So, itās always good to ensure about the hidden charges if a company charges.
NCDEX Account Advantages
There are many advantages of trading in the NCDEX market and some of them are as follows.
- NCDEX increases market transparency. Now, farmers can easily know the price and the demand for their crops in the market. It means the gap between the farmer and the market has reduced up to a maximum extent.Ā
- It helps in discovering prices. As the price of the commodity is fixed by the demand and supply forces in the market. Now, middlemen are totally out of the market who was also charging the price of crops. So, NCDEX has given the biggest relief to farmers by providing this platform.
- It helps in increasing Indian agricultural practices. Quality specification of various products raised quality awareness and now farmer focus more on high-quality crops.
NCDEX Trading Account Myths
There are some myths about NCDEX open account trading. These myths are:
- Commodity trading is a good option for large traders only: Small traders can also get the benefit of commodity trading. It can be done even with a small margin. And you can earn a good profit with commodity trading.
- Poor quality commodity: The quality of the commodity is maintained by NCDEX. It helps in maintaining the right quality of the commodity.
- Commodity trading is not easy to understand: Now-a-day it is very task to understand commodity trading and start earning a good profit in that.
Conclusion
NCDEXās open account helps you to trade in the best commodity exchange of India. If you are a trader, you will earn a good profit or quality delivery of commodities through commodity trading, or as a farmer, you will get the best price of your crops.
Hence, if you are thinking to start commodity trading through NCDEX and earning a huge profit, you can start investing in NCDEX.
Now open the Demat account for FREE!
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