Opportunitiesinboomingcommoditymarketfinalupdatejune2011 110627023117-phpapp02


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Opportunitiesinboomingcommoditymarketfinalupdatejune2011 110627023117-phpapp02

  1. 1. •The worlds oldest established futures exchange, the Chicago Board of Trade, wasfounded in 1848 by 82 Chicago merchants. The first "to arrive" contracts were flourtimothy hay "Forward "arrive flour, seed and hay. Forward contracts on corn wereintroduced in 1851.•The Chicago Mercantile Exchange, was founded as the Chicago Butter andEgg Board in 1898.• Most of the exchanges in the developing World were established in the 1980s and1990s in response to government liberalization of commodity markets.• In the 21st century, online commodity trading has become increasingly popular,and commodity brokers offer front-end interfaces to trade these electronic-basedmarkets.
  2. 2. Source: As per the data compiled from the respective exchange website050100150200250300350400450500Volume (Million Contracts)
  3. 3.  Commodity Markets have their presence in country forover 120 yrs. Trade in commodities has been Unorganized in Regionalmarkets & Local Mandis. Trading in Futures Contracts has been permitted in over120 commodities. Physical commodity market size in India is estimated tobe around 25 lakh crore per annum. Major commodities traded in India are - Gold, Silver,Crude Oil, Copper, Guar, Chana, Spices, among the few.
  4. 4. 6• Ban in forward trading from mid-sixties• Prior to ban– Thriving commodity exchanges for cotton, gold, edible oils etc.– more than 20 regional commodity specific exchanges• Recent developments– Ban completely lifted in 2003– Emergence of national level de-mutualised online multi-commodity exchanges– 3 National and 21 regional exchanges– Trade in 60 commodities compared with just 8 in 2000• Growth exceeds 7-8 times in FY09 over FY10
  5. 5. Exchanges Places SitesShanghai Futures Exchange Shanghai (www.shfe.com.cn )CME Group/Chicago Chicago (www.cmegroup.com)Dalian Commodity Exchange CHINA (www.dce.com.cn )The Zhengzhou Commodity Exchange (ZCE) CHINA (http://english.czce.com)Intercontinental Exchange Europe (www.theice.com)MCX India (http://www.mcxindia.com/)London Metal Exchange- London (http://www.lme.com/)
  6. 6. Ahmadabad Commodity ExchangeFirst Commodity Exchange of India Ltd, KochiThe Bikaner Commodities Exchange Limited Haryana Commodities Ltd., HissarThe Bombay Commodity Exchange Ltd The Indian Pepper and Spice Trade AssociationBhatinda Om & Oil Exchange Ltd., Bhatinda The Meerut Agro Commodities Exchange Co. Ltd., MeerutThe Central India Commercial Exchange Ltd, Gwalior National Board of Trade LimitedThe Chamber of Commerce Rajdhani Oils and Oilseeds Exchange Ltd. , DelhiE-Commodities Ltd The Rajkot Seeds oil & Bullion Merchants` Association LtdThe East India Cotton Association Surendranagar Cotton oil & Oilseeds Association LtdThe East India Jute & Hessian Exchange Ltd, The Spices and Oilseeds Exchange Ltd.& Vijay Beopar Chamber Ltd., Muzaffarnagar
  7. 7. FuturesMCX (Multi Commodity Exchange)NCDEX (National Commodity & DerivativeExchange) &NMCE (National Multi-commodity Exchange)ICEX ( Indian Commodity Exchange)SpotNSEL(SPOT)NCDEX Spot Exchange Ltd. (NSPOT)
  8. 8. 010000200003000040000500006000070000MCX NCDEX NMCE ICEXVOLUME (IN Cr.) Per DayVOLUME (IN Cr.) Per Day
  9. 9. Conversion: Rs. 10 Lakhs = Rs. 1 MillionOct Nov Dec Jan Feb MarYear 2010 2010 2010 2011 2011 2011Value (Rs. In Lakhs) MCX 84768705.18 90590032.24 80146651.04 91979719.82 91206398.35 112030173.8Value (Rs. In Lakhs) NCDEX 9534579 13371891 15392890 18033880 19660006 149855050200000004000000060000000800000001000000012000000Value(Rs.InLakhs)
  10. 10. 020000400006000080000100000120000140000160000Vol in Crore Per DayF&O and MCX Volume in Cr. Per dayF&OMCX/NCDEX
  11. 11. 13Unlike developed markets, participation in Indian market is more retail &individual and not institutional17.724 34.8152.4569.196887.0401002003004005006007008009001000FY06 FY07 FY08 FY09 April-OCT2010USDBillion17.724 34.8152.4569.196887.0401002003004005006007008009001000FY06 FY07 FY08 FY09 April-OCT 2010USDBillion
  12. 12. Source: As per the data compiled from the MCX exchange website0500000010000000150000002000000025000000300000003500000040000000450000002008 2009 2010 2011TradedContracts(inLots)GOLDSILVERCOPPERCRUDE OILZINCNICKELNATURALGASMENTHAOILLEAD
  13. 13. Introduce on October 7, 2008 by launching monthly contracts in the USDINRcurrency pair under the regulatory framework of Securities and Exchange Board ofIndia (SEBI), and Reserve Bank of India (RBI). Consequently, the stock exchangeexpanded its currency derivatives offerings to Euro-Indian Rupee (EURINR), PoundSterling-Indian Rupee (GBPINR) and Japanese Yen-Indian Rupee (JPYINR).Each of these currency contracts on MCX-SX has a life of 12 months from themonth in which it is launched.Currency Trading available in…USD – INREuro-INRPound Sterling-INRJapanese Yen-INR
  14. 14. Total Value(in Crores)2011 10285542010 3445974.7362009 1071582.8622008 43571.98605000001000000150000020000002500000300000035000004000000
  15. 15. • India had long tradition; marketnow being revived; paradigm shiftin thinking,• Huge appetite for speculation;equity players expand intocommodities; more liquidity.
  16. 16. • Banks, MFs, FIIs may be allowed totrade commodities; huge fund flowexpected; volatility will createmarket opportunities for investors;• Gold ETF has all ready launchedA gold exchange-traded fund (or GETF) is an exchange-traded fund (ETF) that aims to track the price of gold. Goldexchange-traded funds are traded on the major stock exchanges including Zurich, Mumbai, London, Paris and NewYork. As of October 2009, gold ETFs held 1,750 tonnes of gold in total for private and institutional investors.[1] Thereare also closed-end funds (CEFs) and exchange-traded notes (ETNs) that aim to track the gold price.Each gold ETF, ETN, and CEF has a different structure outlined in its prospectus. Such instruments do notnecessarily hold physical gold. For example, gold ETNs generally track the price of gold using derivatives. Allexchange-traded instruments, including those that hold physical gold for the benefit of the investor, carry risks beyondthose inherent in the precious metal itself. The most popular gold ETF (SPDR Gold Trust, symbol GLD) has beencompared with mortgage-backed securities and collateralized debt obligations due to its complexity.[2][3] The extensiveanalysis and criticism received by GLD is instructive for reviewing all gold ETFs, many of which are similarly complexand have received little scrutiny.
  17. 17. • Usually derivatives markets are much largerthan the spot markets.• In India itself, the derivatives markets inequity instruments are at least 2 to 3 timesthe size of the spot markets.• With similar assumptions, you can expectdaily volumes of Rs. 1,00,000 crores in thecommodity derivatives markets.CAN YOU AFFORD TO MISS OUT ON THIS?
  18. 18. • Promoted by Inventure Group• Member of NCDEX,MCX & NMCE.• Offers trading in a wide range ofcommodities.
  19. 19. • RMS: We have expert RMS team to monitor yourclient’s trades.• Dealing: will provide you support for dealing.• Research: Daily we are sending out 8-10 researchcalls with accuracy of around 70%.• Call Example-Range Trading>> Buy Gold@ 19612-19622 with S/L 19590for the Target 19660 then 19670,S/l-Stop loss
  20. 20. • Will provide you training for clearingcurrency certification at office everySaturday in collaboration with exchange.• Pricing will be as per F&O segment.
  21. 21. • To be in touch with the prospect and existingbusiness holder• For any query regarding Commodity & Currency..C&C.helpdesk@inventuregrowth.com,• For chattingcommodities.inventuregrowth@yahoo.in,Where all can come to share their view for developthe business.
  22. 22. • Double up your Revenue with same cost andinfrastructure• Post 8 PM trading support
  23. 23. Process for trading (non-physical)• Open broking account• Deposit money for meeting marginrequirements. Margins are usually:– Mark to market payments• Take a position in the commodity• Liquidate the position by squaring up.
  24. 24. Can Buy or Sell in each contract. There are available almost 3-6month contracts.• Process for Delivery sale• Sell the commodity.• Request for giving delivery, if the seller is giving delivery, the buyer hasto accept if his position is outstanding on the settlement date.• Seller will take goods to notified warehouse.• Goods will be assayed and accepted by warehouse.• Warehouse will intimate registrar who will make entry in the seller’s DPaccount.• Now seller is ready to deliver.
  25. 25. Cont…• Process for delivery purchase• Purchase the commodity.• Request for delivery. The option for delivery is seller’s and not buyer’s.(Subject to commodity)• If sellers give delivery and you are marked for receiving delivery by the exchange, you willreceive delivery.• The delivery will be given to you vide entry into your DP account/in physical warehouse receipts.• Else, your position will be squared up at the settlement close out price.• An arbitrage technique in which a trader buys one commodity and sells anothercontract of the same commodity to capitalize on a discrepancy in prices.• The simultaneous purchase and sale of an asset in order to profit from adifference in the price. This usually takes place on different exchanges ormarketplaces or contractsAlso known as a "risk less profit".
  26. 26. .
  27. 27. Sudhakar RaiIn charge – Commodities/Currency.Tel (Off): 91 22 39548500, EXT-579.Mobile : 09987215190,Email:-Sudhakar.rai@inventuregrowth.com
  28. 28. Join Us!Member :NSE, BSE, MCX, NCDEX,NMCEDepository Participant:CDSLRegd. Office :201, Viraj Tower, Near Landmarkconstructing, W.E. Highway, Andheri(E),Mumbai- 400069.Telephone : 91-22-39548500Fax : 91-22-40751535Corporate Office :201, Viraj Tower, Near Landmarkconstructing, W.E. Highway, Andheri (E),Mumbai- 400069.Telephone : 91-22-39548500,Fax : 91-22-40751535Website: Email:www.inventuregrowth.com C&C.helpdesk@inventuregrowth.com,