Embed Size (px)
Citation preview
TRADE IN COMMODITY DERIVATIVES WITH
INVENTURE COMMODITIES LTD.,
INTRODUCTION OF COMMODITY MARKET IN INDIA
THE HISTORY OF COMMODITY EXCHANGES
• The world's oldest established futures exchange, the Chicago Board of Trade, was founded in 1848 by 82 Chicago merchants. The first "to arrive" contracts were flour timothy hay "Forward "arrive flour, seed and hay. Forward contracts on corn were introduced in 1851.
• The Chicago Mercantile Exchange, was founded as the Chicago Butter and Egg Board in 1898.
• Most of the exchanges in the developing World were established in the 1980s and 1990s 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-based markets.
Source: As per the data compiled from the respective exchange website
LARGEST COMMODITY EXCHANGE IN THE WORLD
0100200300400500
Volume (Million Contracts)
INDIAN COMMODITY MARKETS
Commodity Markets have their presence in country for over 120 yrs.
Trade in commodities has been Unorganized in Regional markets & Local Mandis.
Trading in Futures Contracts has been permitted in over 120 commodities.
Physical commodity market size in India is estimated to be around 25 lakh crore per annum.
Major commodities traded in India are - Gold, Silver, Crude Oil, Copper, Guar, Chana, Spices, among the few.
6
EVOLUTION OF COMMODITY MARKETS IN INDIA
• 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
DETAILS…
Exchanges Places Sites
Shanghai 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/)
REGIONAL EXCHANGES
Ahmadabad Commodity Exchange First Commodity Exchange of India Ltd, Kochi
The Bikaner Commodities Exchange Limited Haryana Commodities Ltd., Hissar
The Bombay Commodity Exchange Ltd The Indian Pepper and Spice Trade Association
Bhatinda Om & Oil Exchange Ltd., Bhatinda The Meerut Agro Commodities Exchange Co. Ltd., Meerut
The Central India Commercial Exchange Ltd, Gwalior National Board of Trade Limited
The Chamber of Commerce Rajdhani Oils and Oilseeds Exchange Ltd. , Delhi
E-Commodities Ltd The Rajkot Seeds oil & Bullion Merchants` Association Ltd
The East India Cotton Association Surendranagar Cotton oil & Oilseeds Association Ltd
The East India Jute & Hessian Exchange Ltd, The Spices and Oilseeds Exchange Ltd.
& Vijay Beopar Chamber Ltd., Muzaffarnagar
FUTURES & SPOT MARKET IN INDIA
FuturesMCX (Multi Commodity Exchange)NCDEX (National Commodity & Derivative
Exchange) &NMCE (National Multi-commodity Exchange)ICEX ( Indian Commodity Exchange)
SpotNSEL(SPOT)NCDEX Spot Exchange Ltd. (NSPOT)
BUSINESS IN INDIAN EXCHANGES
MCX NCDEX NMCE ICEX0
10000
20000
30000
40000
50000
60000
70000
VOLUME (IN Cr.) Per Day
VOLUME (IN Cr.) Per Day
VOLUME MONTH WISE MCX/NCDEX
Conversion: Rs. 10 Lakhs = Rs. 1 Million
Oct Nov Dec Jan Feb Mar
Year 2010 2010 2010 2011 2011 2011
Value (Rs. In Lakhs) MCX 84768705.18 90590032.24 80146651.04 91979719.82 91206398.35 112030173.77
Value (Rs. In Lakhs) NCDEX 9534579 13371891 15392890 18033880 19660006 14985505
10000000
30000000
50000000
70000000
90000000
110000000
Valu
e (R
s. In
Lakh
s)
F&O V/S MCX/NCDEX DAILY VOLUME
Vol in Crore Per Day0
20000
40000
60000
80000
100000
120000
140000
160000
F&O and MCX Volume in Cr. Per day
F&OMCX/NCDEX
13
MARKET GROWTH OF 275% OVER FY08 VOLUMES;55% GROWTH OVER FY09.
Unlike developed markets, participation in Indian market is more retail & individual and not institutional
FY06 FY07 FY08 FY09 April-OCT 2010
0100200300400500600700800900
1000
17.724 34.8
152.4
569.196
887.04Chart Title
USD
Bill
ion
FY06 FY07 FY08 FY09 April-OCT 20100
100200300400500600700800900
1000
17.724 34.8
152.4
569.196
887.04Chart Title
USD
Bill
ion
PERFORMANCE OF MARKET
Source: As per the data compiled from the MCX exchange website
2008 2009 2010 20110
5000000
10000000
15000000
20000000
25000000
30000000
35000000
40000000
45000000
GOLD SILVER COPPER CRUDE OIL ZINC NICKEL NATURALGASMENTHAOILLEAD Tr
aded
Con
trac
ts (i
n Lo
ts)
CURRENCY
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). Each of these currency contracts on MCX-SX has a life of 12 months from the month in which it is launched.
Currency Trading available in…
USD – INR
Euro-INR
Pound Sterling-INR
Japanese Yen-INR
TOTAL VALUE (IN CRORES)
250000
750000
1250000
1750000
2250000
2750000
3250000
3750000
COMMODITY FUTURES TRADING
• India had long tradition; market now being revived; paradigm shift in thinking,
• Huge appetite for speculation; equity players expand into commodities; more liquidity.
NEW DEVELOPMENTS
• Banks, MFs, FIIs may be allowed to trade commodities; huge fund flow expected; volatility will create market 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. 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.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.
DEMO OF TRADING
EXPECTED SIZE OF COMMODITY FUTURES MARKETS
• Usually derivatives markets are much larger than the spot markets.
• In India itself, the derivatives markets in equity instruments are at least 2 to 3 times the size of the spot markets.
• With similar assumptions, you can expect daily volumes of Rs. 1,00,000 crores in the commodity derivatives markets.
CAN YOU AFFORD TO MISS OUT ON THIS?
INVENTURE COMMODITIES LTD.,
• Promoted by Inventure Group• Member of NCDEX,MCX & NMCE.• Offers trading in a wide range of
commodities.
SUPPORT FOR BUSINESS DEVELOPMENT
• RMS: We have expert RMS team to monitor your client’s trades.
• Dealing: will provide you support for dealing.
• Research: Daily we are sending out 8-10 research calls 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
• Will provide you training for clearing currency certification at office every Saturday in collaboration with exchange.
• Pricing will be as per F&O segment.
CURRENCY TRAINING
CREATED ID
• To be in touch with the prospect and existing business holder
• For any query regarding Commodity & Currency.. C&[email protected],
• For chatting
[email protected], Where all can come to share their view for developthe business.
START TRADING
• Double up your Revenue with same cost and infrastructure
• Post 8 PM trading support
Process for trading (non-physical)
• Open broking account• Deposit money for meeting margin
requirements. Margins are usually:– Mark to market payments
• Take a position in the commodity• Liquidate the position by squaring up.
OPPORTUNITY FOR TRADING
Futures Trading..Can Buy or Sell in each contract. There are available almost 3-6month contracts.
Delivery Base Trading..
• Process for Delivery sale• Sell the commodity. • Request for giving delivery, if the seller is giving delivery, the buyer has
to 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 DP
account. • Now seller is ready to deliver.
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 will receive 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.
Spot/Futures Arbitrage..• 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. • 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".
.
LETS DO IT !!!!TO TAKE ADVANTAGE OF
THIS ASSET CLASS.
THANK YOU!!
Sudhakar RaiIn charge – Commodities/Currency.Tel (Off): 91 22 39548500, EXT-579.Mobile : 09987215190,Email:[email protected]
Join Us!
Member :
NSE, BSE, MCX, NCDEX,
NMCE
Depository Participant:
CDSL
Regd. Office : 201, Viraj Tower, Near Landmark constructing, W.E. Highway, Andheri(E),Mumbai- 400069.
Telephone : 91-22-39548500Fax : 91-22-40751535
Corporate Office : 201, Viraj Tower, Near Landmark constructing, W.E. Highway, Andheri (E),Mumbai- 400069.
Telephone : 91-22-39548500, Fax : 91-22-40751535
Website: Email:www.inventuregrowth.com C&[email protected],
