Commodities Presentation


Published on

Getting serious about commodities in India...the next big thing to make serious money !!

Published in: Business, Economy & Finance
No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Commodities Presentation

  1. 1. Welcome to the World Of Commodities Trading
  2. 2. quot;Commodities have become an attractive investment in recent years, even for those who may not know much about them but would like to participate in the profit potential from dramatic price advances posted by energy, grains, metals and other commodities, lifting them to the highest overall levels in more than 30 years.quot;
  3. 3. In Coming Years India shall become The Hub of Global Trading in Commodities
  4. 4. Structure of Market In India Ministry of Consumer Affairs, Food & Public Distribution Forward Market Commission On-Line Open Outcry Exchanges Exchanges MCX NMCE NCDEX NBOT (Mumbai) (A’bad) (Mumbai) (Indore)
  5. 5. World’s Major Commodities Exchanges NCDEX MCX
  6. 6. Commodities Segment wise (MCX & NCDEX) COMMODITIES Metals Oilseed Energy Softs Agri. Comm. Complex • Gold •Copper Palm Oil • Crude / Refined • Cotton • Crude • Brent crude • Pepper Palm Oil • Guar Seed • Silver • Mustard Seed •Nickel • Sweet Crude oil • Sugar • Castor Seed • Soy Oil • Soy Bean • Furnace oil • Gur • Steel •Tin • Refined Soy Oil • Castor Oil • Jeera • Copper • Mustard Oil • Chilli • Zinc • Turmeric • Nickel • Etc….. • Lead & Aluminium
  7. 7. Why Commodities? • Commodities are easy to Understand and have positive correlation with Inflation. • The Commodity market are global in nature , hence less risk for manipulation. • Every commodity have separate market in Itself and hence many such market is simulated at one single screen. The trend in one commodity not necessarily have correlation with the trend of other. • Historically Commodities have outperformed the Stock Market . • Diversification through a different asset class. • Low Margins – 4% - 10% only
  8. 8. Opportunities in the Commodity Futures (1)Speculation: It facilitates speculation by providing opportunity to people, although not involved with the commodity, to trade on the views in the movement of commodity prices. (2)Hedging: For the people associated with commodities, the Futures market can provide an effective hedging mechanism against price movements. For example an oil-seed farmer may go short in oil-seed futures, thus ‘locking’ his sale price and in the process hedging against any adverse price risks. • Also, there is a saying that ‘Gold, is the safe haven’. Thus, gold can be used as a hedging tool against other investments.
  9. 9. (3)Arbitrage: Traders may exploit arbitrage opportunities that arise on account of different prices between the two exchanges or between different maturities in the same underlying. (4)Two Way Market Opportunities. Traders will benefit in a Bull or Bear market (5)Spread Trading – Inter Commodity (Gold /silver, guar seed/guar gum) – Intra Commodity Spreads (calendar Spreads) (6)Lower margins compared to Equity Markets, gives scope to higher exposure.
  10. 10. Benefits of Commodities Futures Trading • Additional Investment/Trading opportunity • Diversification of Portfolio – Asset Class • Lower Margins – High leverage for traders • Hedging/ Arbitrage opportunities • Additional trading opportunity after 3.30 PM
  11. 11. Trading Strategies Pure Trading Speculators in the futures As an Investment market can use different strategies to take Investors can build and advantage of rising and Diversify their Portfolio declining prices. The most common are known as “Going Long,” “Going Short” Alternative Ideas Calendar Spread trading Arbitrage Opportunities Spreads involve taking advantage of the price Inter Exchange (NCDEX & difference between two MCX) different contracts of the same commodity Spot -to- Futures
  12. 12. Commodity / Company Correlations 1. Higher Base Metal Prices have a positive impact on Companies producing base metals such as Hindustan Copper / Sterlite Industries / Hindalco etc. Whereas falling prices have an opposite effect. 2. Higher Gold/Silver prices have positive impact on Companies producing Gold/Silver such as Barrick Gold, Newmount Mining & Anglogold Ashanti. Whereas falling prices have an opposite effect. 3. Higher Crude prices have a positive impact on companies producing Crude such as ONGC / Cairn. Also, companies such as BPCL / HPCL margins increases. But falling prices have an opposite effect.
  13. 13. Dow Jones & Copper Correlation
  14. 14. Dow Jones & Crude Correlation
  15. 15. Nifty & Rupee Correlation
  16. 16. Our Research Strengths 1. Strong research team with fundamental & technical analysts tracking International & Agri commodities 2. Special Fortnightly Reports on Intl. & Agri Commodities along with Corporate Reports on a daily basis. 3. Various products are currently being offered to our clients - Calendar Spreads, Positional Calls, Inter-Exchange Spread Calls etc. 4. Our Investor Education Series is primarily aimed towards educating our investors.
  17. 17. Thank You Ricky Warrik (9873707700)