NCDEX launches bullion futures contracts for retail investors

Mumbai, Nov 21 (UNI) The National Commodity and Derivatives Exchange (NCDEX) today launched its new gold (unit of trading: 100 grams) and silver (unit of trading: five kg) futures contracts to attract retail participation in futures trading in the precious commodities, an NCDEX release said.

These contracts would be the addition to the existing gold (one kg) and silver (30 kg) contracts that are traded on the exchange.

The Exchange has launched the new gold and silver futures contracts as retail investors were finding investment in the existing contracts (gold one kg and silver 30 kg) prohibitive.

Under the existing gold contract (one kg) and silver (30 kg) contracts, a retail investor has to put in margin money equivalent to approximately five per cent (at current prices: gold five per cent 45,710, silver seven per cent Rs 40,000) of the contract value.

With the launch of the new bullion contracts, a retail investor can now easily take a position in gold and silver futures contracts by puting in margin money equivalent to five per cent (Rs 4,571 in the case of gold and seven per cent Rs 6,700 in the case of silver) of the contract value.

Managing director and CEO of NCDEX P H Ravikumar said, ''Keen retail investor interest has prompted us to launch the new futures contracts in bullion. Moreover, investment in gold, which is the best hedge against inflation and currency depreciation, is a good asset diversification strategy for retail investors.'' Mr Ravikumar said the retail investors can rest assured about the quantity/quality of gold traded/delivered on the exchange platform as gold certified only by the London Bullion Market Association (LBMA) approved refiners or refiners specified by NCDEX on the settlement day, is accepted as good delivery.

NCDEX has accredited vaults for receipt and delivery of gold.

Gold will be received and delivered only from NCDEX accredited vaults. By launching the new bullion futures contracts, NCDEX is seeking to address the ''need gap'' arising from lack of transparency in prices and non-assurance of quality for the retail participants, the release said.

The advantages of trading in the new bullion futures contracts on NCDEX include: the ability to hold gold in the demat form; low cost of holding gold in demat form; transparency in prices; assurance of quality and purity; and ability to buy and sell bullion at the click of a button.

UNI VD-AR MAZ SKB1846