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Welcome to the World
         Of
Commodities Trading
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;
In Coming Years
         India shall become
                 The
Hub of Global Trading in Commodities
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)
World’s Major Commodities Exchanges




                      NCDEX
                       MCX
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
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
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.
(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.
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
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
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.
Dow Jones & Copper Correlation
Dow Jones & Crude Correlation
Nifty & Rupee Correlation
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.
Thank You

Ricky Warrik (9873707700)
     www.adventus.in
    invest@adventus.in

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Commodities Presentation

  • 1. Welcome to the World Of Commodities Trading
  • 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. In Coming Years India shall become The Hub of Global Trading in Commodities
  • 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. World’s Major Commodities Exchanges NCDEX MCX
  • 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. 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. 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. (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. 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. 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. 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. Dow Jones & Copper Correlation
  • 14. Dow Jones & Crude Correlation
  • 15. Nifty & Rupee Correlation
  • 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. Thank You Ricky Warrik (9873707700) www.adventus.in invest@adventus.in