Commodities trading in India

Type :

Theses

Pages :

52 pages

Format :

.doc

Published date :

03/05/2009

Category :

Economics & finance

Sub category :

Economics

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Summary :

Introduction.
Derivatives.
Derivatives existing in India.
1. Financial derivative.
2. Commodity derivatives.
Indian derivatives market: Looking ahead.
Trading instruments.
1. Forward contract.
2. Futures contract.
3. Options.
4. Swaps.
Participants in derivatives market.
1. Hedgers.
2. Speculators.
3. Arbitragers.
Trading of commodity derivatives In India.
1. Exchange trading.
2. Over the counter.
Commodity markets.
1. Global perspective.
2. Indian perspective.
Company profile.
1. Anagram Stockbuilding Ltd.
Project profile.
1. Commodity for the study-gold.
2. Objectives.
3. Analysis and interpretation of the data.
Suggestions and recommendations.
Bibliography.

Abstract

Commodity Futures trading in india has a long history. The first commodity futures market appeared in 1875. But the new standardized form of trading in the Indian capital market is an attractive package for all the people who earn money through speculation by trading into FUTURES. It is a well-known fact and should be remembered that the trading in commodities through futures' exchanges is merely, "old wine in a new bottle". The trading in commodities was started with the first transaction that took place between two individuals. We can relate this to the ancient method of trading i.e., BARTER SYSTEM. This method faced the initial hiccups due to the problems like: store of value, medium of exchange, deferred payment, measure of wealth etc.. This led to the invention of MONEY. As the market started to expand, the problem of scarcity piled up.

The farmers / traders then felt the need to protect themselves against the fluctuations in the price for their produce. In the ancient times, the commodities traded were - the Agricultural Produce, which was exposed to higher risk i.e., the natural calamities and had to face the price uncertainty. It was certain that during the scarcity, the farmer, realized higher prices and during the oversupply he had to loose his profitability. On the other hand, the trader had to pay higher price during the scarcity and vice versa. It was at this time that both joined hands and entered into a contract for the trade i.e., delivery of the produce after the harvest, for a price decided earlier. By this both had reduced the future uncertainty.