MCX vs NCDEX: Difference, Commodities & Which is Better

In the past ten years, commodity trading has been on the rise in India. More and more investors and traders are moving beyond stocks and mutual funds to explore commodity trading in India to diversify and hedge.

However, for beginners, we often get the following confused. MCX vs NCDEX.

What is MCX?

What is NCDEX?

What are the commodities traded in each exchange?

Which is more preferable for trading or for investing?

This thorough guide breaks down the difference between MCX and NCDEX, their commodities, trading style and helps you determine which exchange is more beneficial to you.

What Is Commodity Trading? 

Commodity Trading deals with the buying and selling of physical assets, such as metals, energy-related products and agricultural products, within a set contract. In India, commodity trading, like all other trading practices, is conducted on regulated exchanges.

The two main exchanges are:

• MCX (Multi-Commodity Exchange).
• NCDEX (National Commodity & Derivatives Exchange).

Knowing the MCX NCDEX comparison is crucial before stepping into this market.  

What Is MCX (Multi-Commodity Exchange)?  

MCX, in terms of trading volume is the biggest commodity derivatives exchange in India  

Key Features of MCX  

Primary focus is on non-agricultural commodities. Founded in 2003. Under SEBI based in Mumbai. MCX is very famous in the trading community due to the high liquidity and volatility in the trading market.  

 

 

MCX Commodities List  

MCX Commodities that are traded the most are:  

• Metals  
• Gold  
• Silver  
• Copper  
• Zinc  
• Aluminium  
• Lead  
• Energy  
• Crude Oil  
• Natural Gas.  

What attracts a lot of intraday and positional traders to MCX is that the global prices influence these commodities greatly.  

What Is NCDEX (National Commodity & Derivatives Exchange)? 

NCDEX is the largest and is the only exchange in India that deals with agricultural commodities.  

Key Features of NCDEX  

NCDEX is of immense importance to the agriculture and agri-economy of India.  

Established in 2003 under SEBI. Based in Mumbai. Mainly deals with agri-commodities.  

NCDEX Commodities List  

Some of the major ncdex commodities are:  

• Agricultural Commodities  
• Soybean  
• Chana  
• Wheat  
• Mustard Seed  
• Cotton  
• Guar Seed  
• Turmeric  
• Jeera.  

NCDEX prices are mainly a result of monsoon, crop output, MSP policies and demand-supply.

MCX vs NCDEX: Core Difference Explained

Let’s understand the difference between MCX and NCDEX.

Basis	MCX	NCDEX
Commodity Type	Metals & Energy	Agricultural
Global Influence	High	Low to Moderate
Volatility	High	Moderate
Liquidity	Very High	Moderate
Trader Type	Intraday & Short-term	Hedgers & Positional
Popular Products	Gold, Crude Oil	Soybean, Chana

This table only summarises the MCX NCDEX.

MCX vs NCDEX: Which is More Beginner-Friendly?

This answer perfectly describes the trading style and risk appetite.

MCX Is Better If:

• You want an intraday trading style
• You prefer liquidity.  
• You can follow the global market flow.  
• You're comfortable with higher risk.  

NCDEX Is Better If:

You prefer a positional trading style, as you've a background in

• Agricultural markets.
• Want lower volatility.  
• Focus on fundamental factors such as crop data.

This is a one-way approach to an answer. There is no single best exchange - the best one totally depends on the trader.

MCX vs NCDEX Trading Styles

MCX Trading Style

1. - Prices change quickly.
2. - Moves with the news (US data, crude oil, dollar value).
3. - Good for scalp and intraday trading.

NCDEX Trading Style

1. - Moves with the seasons.
2. - Weather and government policies affect prices.
3. - Better for swinging and long-term trades.

This difference is important for commodity trading India.

Risk Level

Factor	MCX	NCDEX
Price Swings	Sharp	Gradual
News Impact	Global events	Domestic factors
Margin Risk	High	Moderate
Stop-loss Importance	Very High	High

NCDEX is more stable but MCX will take more risk to get the same chance are results.

Margin and Contract Sizes (MCX vs NCDEX)

1. - MCX contracts tend to have more mini and micro lots (Gold Mini, Crude Mini)
2. - NCDEX contracts have bigger lots so more capital is needed

This makes MCX more accessible to small traders.

MCX Class of Commodities

1. - Offers price transparency
2. - Good liquidity
3. - Low bid-ask spread
4. - Active in the day

Because of this, crude oil and gold tend to have the most trades for MCX in India.

NCDEX Commodities: The Role Of Farmers And Hedgers

Farmers utilise NCDEX for:

• Market Education
• Risk Management
• Strategic Outlook 
• Government Policies and Intervention (MSP).

There is more to NCDEX than market speculation.

MCX and NCDEX:

Both are governed by SEBI. They are subject to similar rigorous compliance procedures. Conduct transactions with registered brokerages. Have partnerships with clearing corporations. From a safety perspective, both exchanges are equally reliable.

Trading Costs: NCDEX And MCX Compared

There are several costs incurred when trading, including:

• Brokerage Costs
• Charges By The Exchange
• SEBI Charges
• Goods And Services Tax
• Stamp Charges.

Trading costs are almost identical for both exchanges, with more to do with the broker than the exchange.

Comparison Of NCDEX And MCX For Long-Term Investors

MCX → Not more appropriate.

NCDEX → More appropriate for extended periods.

Nevertheless, commodities are always to be seen as short-to-medium term assets, unlike equities, which create wealth over the long term.

Mistakes Beginners Often Make

Failing to understand global developments before trading MCX.

• Ignoring crop cycles before trading on NCDEX.
• Taking on too much debt.
• Not setting stop losses.
• Similarities.

Improving success in commodity trading India is a result of trading commodities.

 

 

Which is Better: MCX or NCDEX?  

The answer to this question is subjective.

MCX:  

• You like speedy trading.  
• You actively like to participate in the markets.  
• You follow global news.  

NCDEX:  

• You know about agricultural economics.  
• You like to trade in less volatile markets. 
• You trade more on the fundamentals.  

Both exchanges are used by a lot of seasoned professionals.  

MCX vs NCDEX in a Line Comparison  

MCX is influenced by the global prices of metals and energy and NCDEX is influenced by the supply and demand of agriculture in India.  

 

 

Conclusion  

The difference between MCX and NCDEX is not which is better, but which fits your trading style best. One gives more speed and volatility but the other gives more stability and has more of a focus on the fundamentals.

For newcomers, the best option is to focus on learning one exchange and start with small amounts rather than trying to use both. The trading of both MCX commodities and NCDEX commodities is the same and is dependent on knowledge, discipline and risk management.

 

DISCLAIMER: This blog is NOT any buy or sell recommendation. No investment or trading advice is given. The content is purely for educational and information purposes only. Always consult your eligible financial advisor for investment-related decisions.