Commodity market Preseantation


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Commodity market Preseantation

  1. 1. Trade In Commodity Derivatives With <br /> Inventure Commodities Ltd.,<br />
  2. 2. Introduction of Commodity Market in India<br />
  3. 3. The History of Commodity Exchanges<br /><ul><li>The world's oldest established futures exchange, the Chicago Board of Trade, was</li></ul> founded in 1848 by 82 Chicago merchants. The first "to arrive" contracts were flour<br /> timothy hay "Forward "arrive flour, seed and hay. Forward contracts on corn were<br /> introduced in 1851.<br /><ul><li>The Chicago Mercantile Exchange, was founded as the Chicago Butter and </li></ul> Egg Board in 1898.<br /><ul><li> Most of the exchanges in the developing World were established in the 1980s and</li></ul> 1990s in response to government liberalization of commodity markets.<br /><ul><li> In the 21st century, online commodity trading has become increasingly popular,</li></ul> and commodity brokers offer front-end interfaces to trade these electronic-based<br /> markets.<br />
  4. 4. largest commodity exchange in the world<br />Source: As per the data compiled from the respective exchange website<br />
  5. 5. Indian Commodity Markets<br /><ul><li>Commodity Markets have their presence in country for over 120 yrs.
  6. 6. Trade in commodities has been Unorganized in Regional markets & Local Mandis.
  7. 7. Trading in Futures Contracts has been permitted in over 120 commodities.
  8. 8. Physical commodity market size in India is estimated to be around 25 lakhcrore per annum.
  9. 9. Major commodities traded in India are - Gold, Silver, Crude Oil, Copper, Guar, Chana, Spices, among the few.</li></li></ul><li>6<br />Evolution of Commodity markets in India<br />Ban in forward trading from mid-sixties <br />Prior to ban<br />Thriving commodity exchanges for cotton, gold, edible oils etc.<br />more than 20 regional commodity specific exchanges<br />Recent developments<br />Ban completely lifted in 2003<br />Emergence of national level de-mutualised online multi-commodity exchanges<br />3 National and 21 regional exchanges<br />Trade in 60 commodities compared with just 8 in 2000<br />Growth exceeds 7-8 times in FY09 over FY10<br />
  10. 10. Details…<br />
  11. 11. Regional Exchanges<br />
  12. 12. Futures & Spot Market in India<br />Futures<br /><ul><li>MCX (Multi Commodity Exchange)
  13. 13. NCDEX (National Commodity & Derivative Exchange) &
  14. 14. NMCE (National Multi-commodity Exchange)
  15. 15. ICEX ( Indian Commodity Exchange)</li></ul>Spot<br /> NSEL(SPOT)<br />NCDEX Spot Exchange Ltd. (NSPOT)<br />
  16. 16. Business in Indian Exchanges<br />
  17. 17. Volume Month wise MCX/NCDEX<br />Conversion: Rs. 10 Lakhs = Rs. 1  Million<br />
  18. 18. F&O V/s MCX/NCDEX Daily Volume<br />
  19. 19. Market growth of 275% over FY08 volumes;55% growth over FY09.<br />Unlike developed markets, participation in Indian market is more retail & individual and not institutional<br />13<br />
  20. 20. Performance of Market<br />Source: As per the data compiled from the MCX exchange website <br />
  21. 21. Currency<br />Introduce on October 7, 2008 by launching monthly contracts in the USDINR currency pair under the regulatory framework of Securities and Exchange Board of India (SEBI), and Reserve Bank of India (RBI). Consequently, the stock exchange expanded its currency derivatives offerings to Euro-Indian Rupee (EURINR), Pound Sterling-Indian Rupee (GBPINR) and Japanese Yen-Indian Rupee (JPYINR). <br />Each of these currency contracts on MCX-SX has a life of 12 months from the month in which it is launched.<br />Currency Trading available in…<br />USD – INR<br />Euro-INR<br />Pound Sterling-INR<br />Japanese Yen-INR<br />
  22. 22. Total Value (in Crores)<br />
  23. 23. Commodity Futures Trading<br /><ul><li>India had long tradition; market now being revived; paradigm shift in thinking,
  24. 24. Huge appetite for speculation; equity players expand into commodities; more liquidity. </li></li></ul><li>New Developments <br /><ul><li>Banks, MFs, FIIs may be allowed to trade commodities; huge fund flow expected; volatility will create market opportunities for investors;
  25. 25. Gold ETF has all ready launched</li></ul>A gold exchange-traded fund (or GETF) is an exchange-traded fund (ETF) that aims to track the price of gold. Gold exchange-traded funds are traded on the major stock exchanges including Zurich, Mumbai, London, Paris and New York. As of October 2009, gold ETFs held 1,750 tonnes of gold in total for private and institutional investors.[1] There are also closed-end funds (CEFs) and exchange-traded notes (ETNs) that aim to track the gold price.<br />Each gold ETF, ETN, and CEF has a different structure outlined in its prospectus. Such instruments do not necessarily hold physical gold. For example, gold ETNs generally track the price of gold using derivatives. All exchange-traded instruments, including those that hold physical gold for the benefit of the investor, carry risks beyond those inherent in the precious metal itself. The most popular gold ETF (SPDR Gold Trust, symbol GLD) has been compared with mortgage-backed securities and collateralized debt obligations due to its complexity.[2][3] The extensive analysis and criticism received by GLD is instructive for reviewing all gold ETF's, many of which are similarly complex and have received little scrutiny.<br />
  26. 26. Demo of Trading<br />
  27. 27. Expected size of commodity futures markets<br /><ul><li>Usually derivatives markets are much larger than the spot markets.
  28. 28. In India itself, the derivatives markets in equity instruments are at least 2 to 3 times the size of the spot markets.
  29. 29. With similar assumptions, you can expect daily volumes of Rs. 1,00,000 crores in the commodity derivatives markets. </li></ul>CAN YOU AFFORD TO MISS OUT ON THIS?<br />
  30. 30. Inventure Commodities Ltd.,<br /><ul><li>Promoted by Inventure Group
  31. 31. Member of NCDEX,MCX & NMCE.
  32. 32. Offers trading in a wide range of commodities. </li></li></ul><li>Support for business development<br />RMS: We have expert RMS team to monitor your client’s trades.<br />Dealing: will provide you support for dealing.<br />Research: Daily we are sending out 8-10 research calls with accuracy of around 70%.<br />Call Example- <br />Range Trading>> Buy Gold@ 19612-19622 with S/L 19590<br />for the Target 19660 then 19670,<br /> S/l-Stop loss<br />
  33. 33. Currency Training<br />Will provide you training for clearing currency certification at office every Saturday in collaboration with exchange.<br />Pricing will be as per F&O segment.<br />
  34. 34. Created ID<br />To be in touch with the prospect and existing business holder<br />For any query regarding Commodity & Currency..<br />C&,<br />For chatting <br />, <br />Where all can come to share their view for develop<br />the business. <br />
  35. 35. Start Trading<br />Double up your Revenue with same cost and infrastructure<br />Post 8 PM trading support<br />
  36. 36. Process for trading (non-physical)<br /><ul><li>Open broking account
  37. 37. Deposit money for meeting margin requirements. Margins are usually:
  38. 38. Mark to market payments
  39. 39. Take a position in the commodity
  40. 40. Liquidate the position by squaring up. </li></li></ul><li>opportunity for trading<br />Futures Trading..<br />Can Buy or Sell in each contract. There are available almost 3-6<br />month contracts. <br />Delivery Base Trading..<br />Process for Delivery sale<br />Sell the commodity. <br />Request for giving delivery, if the seller is giving delivery, the buyer has to accept if his position is outstanding on the settlement date. <br />Seller will take goods to notified warehouse. <br />Goods will be assayed and accepted by warehouse. <br />Warehouse will intimate registrar who will make entry in the seller’s DP account. <br />Now seller is ready to deliver.<br />
  41. 41. Cont…<br />Process for delivery purchase<br />Purchase the commodity. <br />Request for delivery. The option for delivery is seller’s and not buyer’s.(Subject to commodity)<br />If sellers give delivery and you are marked for receiving delivery by the exchange, you will receive delivery. <br />The delivery will be given to you vide entry into your DP account/in physical warehouse receipts.<br />Else, your position will be squared up at the settlement close out price.<br />Spot/Futures Arbitrage..<br /><ul><li>An arbitrage technique in which a trader buys one commodity and sells another contract of the same commodity to capitalize on a discrepancy in prices.
  42. 42. The simultaneous purchase and sale of an asset in order to profit from a difference in the price. This usually takes place on different exchanges or marketplaces or contractsAlso known as a "risk less profit". </li></li></ul><li>.<br />Lets DO it !!!!<br />To take advantage of This asset class.<br />
  43. 43. Thank You!!<br />SudhakarRai<br />In charge – Commodities/Currency.<br />Tel (Off): 91 22 39548500, EXT-579.<br />Mobile   : 09987215190,<br /><br />
  44. 44. Join Us!<br />Website: Email:<br /> C&, <br />Regd. Office : <br />201, Viraj Tower, Near Landmark constructing, W.E. Highway, Andheri(E),Mumbai- 400069.<br />Telephone : 91-22-39548500Fax : 91-22-40751535<br />Corporate Office : <br />201, Viraj Tower, Near Landmark constructing, W.E. Highway, Andheri (E),Mumbai- 400069.<br />Telephone : 91-22-39548500,Fax : 91-22-40751535<br />Member : <br />NSE, BSE, MCX, NCDEX,<br />NMCE<br />Depository Participant:<br />CDSL<br />