NCDEX recently launched the 2 Sectoral Agri indices namely GUAREX & SOYDEX where GUAREX has shown a good response as it got lived a few days back whereas SOYDEX is going to be live from today onwards.
SOYDEX is comprised of soybean and refined soy oil contributing to 69.72% and 32.08% respectively and will follow the trend of its underlying commodities.
INDEX COMPONENTS FOR FY 2021-22
|NAME OF SYMBOL||NCDEX SOYDEX|
|LOT SIZE||100 UNITS|
|TICK SIZE||Rs 1|
|TRADING HOURS||Monday to Friday 09:00AM to 09:00PM|
|EXPIRY OF THE CONTRACT||Last trading day of the month|
|CONTRACTS AVAILABLE FOR TRADING||30 Sept 2021 and 29 Oct 2021|
Features and Benefits of SOYDEX:
- Cash settled i.e., no physical delivery
- Low margin required (10% of initial margin)
- Act as Hedging Tool
- Diversification of Portfolio
- Calendar spread opportunities are there
- Index Arbitrage
- Low cost of trading
- No exchange charges (Trading charges/ Risk Management Fee are zero)
The value of SOYDEX can be calculated as: SOYDEX Price = 0.7* Soybean Price + RSO Price where 1 lot of SOYDEX consist of 7MT of Soybean and 1MT of Refined Soybean Oil.
As SEBI has allowed the spread margin benefit in the index so one can benefit oneself by trading through this feature, which means that if we are having a buy position in underlying futures then we can sell the index future with only 25 % of the overall margin which will be beneficial for all kinds of traders specially for hedgers and physical delivery clients. By introducing this index, NCDEX will also attract small retail participants as it is low-cost contract and will act as a directional indicator for the soy complex.