20101223

COMMODITY MARKET

Commodities Trading

Commodity Derivatives have had a long and chequered presence in India. In early 2000, the commodities futures markets re-opened after a gap of more than 30 years and in a very short span have grown very rapidly through the system of online screen based trading.

Commodity Derivatives markets are amongst the world’s largest financial markets. Initially conceived as a Hedging platform for producers and consumes in the local markets, Commodity Derivatives trading today has evolved to provide sophisticated Investment and Risk managed opportunities to various organizations around the world.

Investment in commodities was traditionally done as a part of a broader hedging strategy, has today evolved as an asset class in its own right and offer immense potential as a separate asset class for market savvy investors, arbitragers and speculators.

Companies can sue these markets either to mitigate their exposure to fluctuations in raw material and finished goods prices or treasuries to invest their surplus cash flows.

Exchanges

Currently, participants in India have the choice of trading on either the Multi Commodity Exchange of India (MCX) or National Commodities & Derivatives Exchange Limited (NCDEX) on a variety of commodities spanning energy, metals, precious metals and agricultural products.


Who can trade commodities?

Physical market participants (firms who play a key role within the production chain) like producers, trading houses, manufacturers, fabricators, importers & exporters.

Specialized Government agencies which have mandates for food security
Companies can use these markets either to mitigate their exposure to fluctuations in raw materials and finished goods prices.

Corporate, Treasuries, Financial institutes, HNI and Retails clients.
Commodities trading offer immense potential as a separate asset class for market savvy investors, arbitragers and speculators and for treasuries to invest their surplus cash flows.
sorce: http://www.way2wealth.com/Commodities.asp

1 comment:

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