What is a commodity exchange?

A commodity exchange is an entity that provides platforms, rules, regulations and procedures for the exchange and trade of commodities and related investments, called derivatives.

Just the way one invests in stocks through a stock exchange, one can invest in a commodity through a commodity bourse.

Commodity exchange, also called commex, allow trade in myriad products such as agricultural produce, metals, energy etc and also contracts, such as spot, forwards, futures and options. Globally, advanced commex platforms allow trade in certain sophisticated products such as swaps, environment based products and freight contracts.

India has six commodity exchanges Multi Commodity Exchange (MCX), National Commodities and Derivatives Exchange (NCDEX), National Multi Commodity Exchange, Indian Commodity Exchange, ACE Derivatives Exchange and the Universal Commodity Exchange.