Which is the best for trading NSE or MCX?
In India there are two famous exchanges namely NSE and MCX. The traders are bit confused which exchange will be suitable for them. Because they will make loss in one exchange and find fault on the other exchange. The stock exchange is more secure than the commodity trading and one should know how to use it.
In NSE shares, bonds, etf, mutual funds and derivative products like future and option, index, stocks and currency are getting traded, whereas in MCX and in commodity product only future gets traded. In MCX – SX equity is getting traded for namesake. Only in NSE there is a chance for minimum risk and maximum profit. NSE is best and suitable for trading than MCX and NCDEX and the reason for that is depicted below.
Difference between NSE and Mcx expiry settlement
In NSE the future and option expiry settlement will be accurate. I.e. in NSE every month last Thursday will be the expiry time for future and option. On the last Thursday the last half an hour (3 pm to 3.30 pm ) weighted average price of an index or stock will be decided as the closing price and settlement price. The last half an hour weighted average price is a particular index or stock’s spot price which is decided as the closing price. If a trader has a long or short position and if a trader has not closed his future or option position then on the last Thursday that particular future or option spot price will be taken and settlement will be made automatically based on that spot price.
MCX and NCDEX expiry settlement disadvantages
In MCX and NCDEX the settlement option is not like NSE. In MCX and NCDEX each future will have a separate expiry date. In MCX and NCDEX the client will be asked by the broker to square off between 2hrs to six days before the expiry time. Else the broker himself will square off the positions. This is because in MCX and NCDEX a particular future asset has to be taken as delivery. So the clients are pushed to close their position before the expiry. Surely there will be a difference between the settlement price and the price which the client has closed their positions. If a client has a short position then he has to square off before the expiry date. The trading in MCX and NCDEX is a bit confusable. Also the client will be able to view accurately the spot price of the future traded in MCX and NCDEX, where as in NSE the settlement structure will be quite accurate. It is a big mistake that MCX and NCDEX do not have the option trading. This is not only a disadvantage to traders, but also to the commodity exchange also, because if an investor knows quite good knowledge about trading, then they will choose the stock market as their best option. Unless MCX and NCDEX bring a quite good structure like NSE commodity trading will always be a risky one.