49459414 Commodity Markets

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Indian Commodity Markets


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TopicsCommodity markets overview

Commodity Markets

Global Commodity markets

Indian Commodity markets

Regulations and Risk management


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INDIA Macro-Economic Indicators

One of worlds fastest growing

significant economiesGDP growth rate > 8% pa

Forex reserves > $ 275 billionPopulation one billion:>110 cr.

crores growing at 1.5% paThird largest producer of food


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Commodities- Defined

Goods with economic value; traded

in bulk; usually raw material forfurther processing;

Agri: Food crops, non-food crops;

Non-agri: metals, energy, polymers

Others: cattle head, orange juice


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What is a Commodity ?

Commodity includes all kinds of goods Commodity futures contracts are

regulated under the Forward MarketContracts (Regulation) Act, 1952

FCRA defines goods as every kind ofmovable property other than actionableclaims, money and securities


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Commodities Segment wise

COMMODITIES

MetalsMetals Edible OilsEdible Oils SoftsSofts Other Agri.

Comm.

Other Agri.

Comm.

Cotton

Sugar

Silk

Gur

Wheat

Guar Seed

Soy Beans

Castor Mustard

Urad

Rice

Chana Etc..

Copper

Nickel

Tin

Crude Palm Oil

Soy Oil

Mustard Oil

Gold

Silver

Steel

EnergyEnergy

BrentcrudeOil

Furnace Oil


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Worlds Major

Commodity Exchanges

NCDEX


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Major Global Commodity Exchanges

CBOT Chicago Board of Trade (1848)

Oldest existing commodity exchange in the world Initially started with agricultural commodities like corn,

wheat, soybeans and oats

Now trading in non-storable agricultural commoditiesand non-agricultural products also

Electronic trading introduced in 1994 after 150 years of

existence NYMEX

Two divisions

NYMEX division trading in energy and platinum andCOMEX division trading in other metals.


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CME Chicago Mercantile Exchange (1898)

Largest futures exchange in the Us and the largest futuresclearing house in the world for futures and options trading Introduced the first financial futures Most volumes in interest rate futures, stock indices and

foreign exchange futures LME London Metal Exchange (1877)

Worlds premier non-ferrous metals market, with highly

liquid contracts IPE International Petroleum Exchange SIMEX Singapore International Monetary Exchange

Contracts in different Fuels and Gold

SICOM Singapore Commodity Exchange variousrubbers and robusta coffee


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KLCE Kuala Lumpur Commodity Exchange Non-fuel commodities

First exchange to start crude palm oil contracts in 1980

Brazil Bosla de Mercadorias and Futuros US$denominated coffee, soyabean, live cattle, feedercattle, cotton, crystal sugar, corn and gold

Buenos Aires Grain Exchange, Australia 1854

one of the oldest in the world Grain futures started in 1907

Wheat, maize, sunflowers, soybeans,

US$ denominated contracts


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Evolution of Commodity Derivatives

Age-old phenomenon

12th century BC: China, Egypt, Austria, India and Japanused forward market.

In 17th Century, Japanese Rice Farmers have usedfutures market to secure the future value of theirproduction.

1848 CBOT

1875 Bombay Cotton Traders Association

1919 Calcutta Hessian Exchange Ltd which wasnamed in 1945 as EIJHE with the merger of East IndiaJute Association Ltd

Indian Context Various


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Indian Context - VariousCommittees

Khusro Committee

The Khusro Committee (June 1980) had recommended reintroduction of

futures tradingin most of the major commodities , including cotton, kapas,raw jute and jute goodsand suggested that steps may be taken forintroducing futures trading in commodities, like potatoes, onions, etc. atappropriate time. The government, accordingly initiated futures trading inPotato during the latter half of 1980 in quite a few markets in Punjab and

Uttar Pradesh

Kabra Committee (1994)

Reintroduction of futures tradingin various commodities like BasmatiRice, Cotton and Kapas, Raw Jute and Jute Goods, Groundnut ,rapeseed/mustard seed , cottonseed , sesame seed , sunflower seed ,safflower seed , copra and soybean , and oils and oilcakes of all of them,Rice bran oil, Castor oil and its oilcake, Linseed, Silver and, Onions.

Upgradation of existing futures exchanges

Upgradation of facilities in the physical commodities markets also by way ofimproving the quality of warehousing etc.

E l ti f I di C dit


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Evolution of Indian Commodity

Derivatives 1969 Ban on Commodity Futures

1990s many committees appointed tostudy need of commodity futures trading

1997 invitation to set up NMCEs 2003 Ban totally lifted, 54 commodities

freed up

P R i it f S tti f


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Pre-Requisite for Setting up of aCommodity Exchange

These multi-commodity exchanges have the following

essential features. De-mutualized form of organization

On-line trading and clearing system with national reach

Delivery of underlying commodity backed by a warehouse receipt Real time price and trade information dissemination

Transparency in operations

Professional management

Participation of reliable intermediaries such as Banks/ Institutions/Warehouses

3 NMCES -- NMCE, MCX and NCDEX


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Commodity Exchanges

National CommodityExchange

Regional CommodityExchange

1 Compulsory online trading No compulsion for online trading

2 exchange should bedemutualised

exchange need not bedemutualises

3 exchange is recognised on apermanent basis

Exchange is recognised for a fixedperiod, after which it has to applyfor re-registration

4 All commodities permitted bygovernment for futures tradingcan be traded

Exchange has to apply for eachcommodity for futures trading.Sensitive commodities like goldand silver, rice and wheat are not

permitted for trading

Obj ti f C dit


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Objectives of CommodityFutures Trading

Leads to price discovery and Price RiskManagement Buyers and sellers at the futures exchanges conduct

trading based on their assessment of inputs regarding

specific market information, expert views andcomments, the demand supply equilibrium, governmentpolicies, inflation rates, weather forecast, marketdynamics, hopes and fears

Obtaining protection from uncertain adverse pricemovements

Provides hedging option


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Investment in Commodities.. Why?

A smart Investment choice

Risk Adjusted returns of a portfolio comprisingcommodities can be better than a pure equityor bond portfolio

Volatility is much lower in the commoditymarket compared with that in equities andbonds

Commodity market has little correlation withthe equity and bond markets.

Thus, commodity futures are an other asset class totraditional equity and bond market investors.


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Diversification Benefits

Prtfolio Structure Absolute

cumulative

returns

Risk of

portfolio

Adjusted

Returns

100% stocks 73.7 24.3 3.0250% stocks + 50% gold 47.8 14.37 3.33

50% stocks + 50% silver 48.3 13.29 3.63

100% gold 21.8 10.89 2

100% silver 22.9 13.14 1.74

100% bonds 25.2 7.92 3.18

50% bonds + 50% gold 23.5 8.79 2.67

50% bonds + 50% silver 24 6.58 3.65

source: NCDEX

Risk Adjusted Returns for the period 1997-2003, in %


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Volatility comparison - Summary

Average annual volatility

Sensex or Nifty 25-30%Govt Sec Index 5-10%Gold 12-18%

Silver 15-25%Cotton 10-12%

Oil seeds 15-20%Commodities are less volatile compared toequity market, but more volatile as compared

to G-Secssource: NCDEX and www.ficci.com - conference on commodity derivatives


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Correlation coefficients in Indian Markets

Gold Silver Stocks BondsGold 1 0.55 -0.09 -0.028

Silver 1 -0.06 -0.015Stocks 1 -0.112

Bonds 1

Data: LBMA bullion prices, NSE Nifty, NSE G-Sec IndexSource: NCDEX

Objectives of Commodity


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Objectives of Commodity

Futures Trading Integrates players and markets

Improves cropping pattern Ensures Liquidity

Provides Leverage Provides Credit Accessibility

B fi i i


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Beneficiaries

Farmers/Primary producers

Processors/Manufacturers Exporters/Importers

Traders/Brokers/Speculators

Government Banks and Financial Institutions


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Banks as Market Players

Owner/Promoter (ICICI , PNB, UBI,Canara, BOI, SBI, Corporation etc.)

Clearing Member (HDFC, ICICI etc.)

Investor/Trader/Broker

Financier (PNB, HDFC, Corporation,Axis, SBI, Karur Vysya, ICICI etc.)

Warehouse Receipts backed by acommodity Exchange

Non-fund based financing.

D d & S l D i


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Demand & Supply Drivers

Fundamental factors: weather,

quantum of output, quality, stocks,export / import trade, govt policies,tariffs, taxes, Tastes, prices,

population, level of economicactivity, income (and changes

therein);Price drivers: role of funds; geo-

political concerns; inflation;

Global Agribusiness


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Global Agribusiness

Rising output, falling prices; demand

trails supplies;Technology (agbiotech) & subsidy

(OECD) drive output growth

Growth expected in Asia, bothproduction and consumption;

Outlook now changing effect ofhigh crude prices? WTO? Diseases?

Gl b l N i M k


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Global Non-agri Markets

Energy, base metals, precious

metals huge demand surge(China / Asia factor), supply

constraints, natural calamities,geo-political concerns, inflation

fears, huge speculativeinterest, role of funds;

Indian Agribusiness


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Indian Agribusiness

Highly fragmented and low scale -

production, processing, marketing;Uncertainty in output, quality, price;

Long supply chain; too manyintermediaries; no primary grading/processing; non-standard quality;

Marketing restrictions

External & internal challenges

I di i k t


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Indian non-agri market

Economic growth driving

demand for energy products;base metals; iron ore and steel;

Will India go the China way?Huge appetite for bullion;

demand income and priceelastic;

Thrust of Government Policy


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Thrust of Government Policy

Economic liberalisation;internal

reforms; trade freedom /no controlsNational Agricultural Policy

Protection to domestic producersWTO compatibility

Risk management


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Emerging Scenario

Expansion of commodity trade

Shorter supply chain

Competition from imports

Entry of multinationals

Dominance by a few large firms

S


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Emerging Scenario

Waning role of government

Role for technology: InformationTechnology, agriculture and

biotechnology applications Integration of domestic market with

global marketHeightened risk perception

Global Commodity Market


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Global Commodity Market

Market faces uncertainties: high crudeprices threaten global growth; Chinafactor; will supply respond to high prices?

Rising profile of commodities high

rewards; investors more aware; pricestouch multi-year highs; media;

Institutional investor interest rising MFs, pension funds;


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Commodities MarketsSpot Market

Derivatives Market

Spot Commodities Markets


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p

(Mandi Trading) Governaned by State Agricultural Marketing

Boards(SAMB), Mandi Board (Farmers, Traders,

State) More than 7000 Mandis trading in about 140 crops

Participants : Farmers, Licensed Traders, Brokers& Wholesale Dealers

Mandi Inspectors issue type & quantity certificate

Mandi fees :Transaction fee, Taxes; total variesbetween 4% and 12%

Trading, Clearing and Settlement

A D i ti i


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A Derivative is

A security or contractdesigned in

such a way that Its price is derivedfrom the price

ofAn underlying asset Underlying asset for the derivative

Equity shares, indices, debt instruments,commodities, currency, interest rate,

derivatives


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Derivatives Market

Derivatives are financial contracts.

The value of such contracts is derived from the value of someunderlying assets. Such underlying asset may be equity,commodity, currency, or debt instrument or borrowing amountetc.

With Securities Laws (Second Amendment) Act, 1999, Derivativeshas been included in the definition of Securities. The termDerivative has been defined in Securities Contracts

(Regulations) Act, as :A Derivative includes :

(a) A security derived from a debt instrument, share, loan, whether

secured or unsecured, risk instrument or contract fordifferences or any other form of security;


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Derivatives Market

(b) A contract which derives its value from the prices,

or index of prices, of underlying securities;

Derivatives are a key part of the financial markets.

Derivatives market is comprised of

(a) Derivative products or financial contracts

(b) Participants in the derivatives market(c) Regulator(s)

Gl b l D i i I d Ch l f


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Global Derivatives Industry - Chronology ofInstruments

Forward contract - is the oldest instrument.

1874 - Commodity futures. 1972 Futures contract on foreign currencies.

1973 Equity options.

1975 Interest rate futures.

1981 Currency swaps

1982 Interest rate swaps, equity index futures.

1983 Stock index options

1994 Introduction of credit derivatives.

Derivative Markets in India


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The prohibition on options in SCRA was removed in1995. Foreign currency options in currency pairs otherthan rupee were the first options permitted by RBI.

The Reserve Bank of India has permitted options,interest rate swaps, currency swaps and other risk

reductions OTC derivative products. Besides the Forward market in currencies has been a

vibrant market in India for several decades.

D i ti M k t i I di


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In addition the Forward Markets Commission has allowed thesetting up of commodities futures exchanges. Today we have 24

commodities exchanges most of which trade futures.

e.g. The Indian Pepper and Spice Traders Association (IPSTA) andthe Coffee Owners Futures Exchange of India (COFEI).

In 2000 an amendment to the SCRA expanded the definition ofsecurities to included Derivatives thereby enabling stockexchanges to trade derivative products.

In the year 2000 exchange-traded equity derivatives wereintroduced in the Indian market.

D i ti P d t


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Derivative Products

OTC products (over the counter)

(a) Forward contracts (b) Interest rate swaps

(c) Forward rate agreements.

Traded through exchanges

(a) Futures contracts

(b) Options contract.

Forward / Futures


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Contracts

Governed by provisions of

Forward Contracts (Regulation)Act, 1952

Three broad categories ofcontracts: Ready Delivery;

Forward; Option in goods.

Forward / Futures contracts


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Forward / Futures contracts

Ready Delivery Contracts:

contracts for delivery ofgoods where delivery of

goods and payment thereofcompleted within 11 days

from contract date; suchcontracts outside purview ofFCR Act.

Forward / FuturesC


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Contracts

Forward Contracts: contracts for

delivery of goods that are notready delivery contracts (i.e.

completion of delivery and/orpayment beyond 11 days); such

contracts governed by FCR Act.

Forward / FuturesC


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Contracts

Option in goods: currently,

totally prohibited under FCR Act.An agreement which gives option-buyer the right but not obligation to

buy or sell a particular futurescontract at a stated price at any

time prior to a specified date

Forward Contracts two types


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Forward Contracts two types

Specific delivery contracts

Other than specific deliverycontracts though contract of

second type has not been definedunder FCR Act, it is called futures

contract in trade parlance.

Specific Delivery Contracts


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p y

Essentially for merchandising;

enable producers & consumers tomarket / cover a commodity

Generally negotiated directly

including contract terms bysellers/buyers

TSD and NTSD contracts

Futures Contracts


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Futures Contracts

Are forward contracts other than

specific delivery contracts;Entered into under auspices of an

exchange or association;

Contract terms goods quantity,quality, place of delivery and time

of contract maturity standardised;parties to negotiate only rate

Futures Contract -St d di ti


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Standardisation

Trading in standard unit only

Price quote for basis variety Delivery month standardised

All open position marked-to-marketdaily at settlement price

Tenderable goods must meet contract

specifications Tendered goods to be certified by

approved surveyor

Benefits of Futures Trading


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g

Price discovery helps producers/sellers and consumers/buyers as alsoexporters discover price for a futuredate; helps take informed decision;

Price risk management helps hedgeprice risk or insure against adverseprice movement

Benefits of Futures Trading


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e e ts o utu es ad g

Stabilises prices: helps moderate

heavy price fluctuations Integrates prices nationwide

Balances demand-supply over time

Fosters healthy competition

Barometer for farmers and traders

CONCEPT OF FUTURES TRADING


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WHO BENEFITS.

Speculators benefit through pricefluctuation.

Intermediaries benefits through priceadvantage between ready and futureprices (Basis) and prices between

two futures contract (Spread) End users benefit because of lock-in of

prices.



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IS FUTURES TRADING SAME ASFORWARD TRADING? Futures Trading is a refined approach to the

forward trading It is a forward contract which isnot a specific delivery contract.

Forward trading is

a bilateral contract;

non-standardised contract specifications



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WHO ARE THE CONSTITUENTS OFFUTURES TRADING? Hedgers who lock the prices in order to minimise

the risk.

Speculators who take advantage of the pricedifferences and play in the market.

Traders who offer two way quotes and provideliquidity.



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WHAT ARE THE ECONOMIC FUNCTIONSOF FUTURES TRADING? Price Discovery

Price Risk Mechanism



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DOES FUTURES TRADING

GUARANTEE ANY PROFIT? Futures Trading does not guarantee any profit or

minimise the loss. It is purely a hedginginstrument

by which the prices are locked in as per the choiceof the parties.

There is another derivative product called options(not permitted in India for commodities) which actsas an insurance by paying a premium to the writerof the optionswhereby the losses are restricted butthe profits are unlimited.



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WHAT ARE THE CHARACTERISTICS

OF A GOOD FUTURES MARKET? There should be enough liquidity in the ready

market.

There should be large number of players fromdifferent categories.

The prices quoted in the futures market should

have linkage with the ready market rates. The tick size should be minimum enough to attract

enough liquidity.



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FUTURES MARKET SCENARIO IN

INDIA Illiquid markets

Fragmented markets

Multi-commodity risks

Different contract specifications for the

same commodity in different Exchanges Absence of Options Trading



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HOW TO SELECT A COMMODITY FORFUTURES TRADING? Homogenous specification

Adequate liquidity in the ready market

Large number of players for the commodity Commodities that can be stored for a

reasonable period

Need to have a demand supply mismatch Prices not to be controlled by the Government

No restriction as to movement of goods



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COMMODITIES NOT COVERED UNDERTHE PRESENT PROVISION (FC(R)ACT) Present Act permits only moveable property other

than actionable claims, money and securities.

Not including intangible items like electricity,weather, indices.



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CONVERGENCE OF FUTURES ANDREADY MARKET: The difference between the ready and futures

market is generally the carry-over cost.

On the due date, both the prices converge.

In case the settlement rates are proper (perfect),then it makes no difference if the deliveries aresettled within or outside the Exchange.



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HOW TO ORGANISE FUTURESTRADING? Select the commodities that fulfill the basic

criteria for the futures trading.

Set contract specifications which should be intune with market conditions.

Set limits for trading.

Design appropriate risk managementtechniques to ensure default-free trading,clearing and settlement environment.



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HOW TO ORGANISE

Ensure contract terms are not changed duringthe running of the contract.

Trading may be open ended or bracketed.

Positions on the due date is either settled incash or by physical delivery.

Open positions are not allowed to be carried

over to the new settlement. Delivery may be compulsory OR at the

option of the buyer or seller.



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FUTURES TRADING FROM ANINVESTORS POINT OF VIEW Futures trading is a form of investment which

involves speculating the price of a commodity goingup or down in the future.

This a highly leveraged instrument: by paying asmall margin, you can play on a large scale.

High leverage is both advantageous or lossmaking: depending upon you value judgment.



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FUTURES FROM AN INVESTORS

. Spread trading catches up the fancy of theinvestors; i.e; trade on buy-sell bid (if the currentrate for a derivative product X is say Rs. 400/-,buy at Rs. 402/- and sell at Rs. 398/- ) Trade on thisspread.

You may put stop-loss order to arrest losses.

In case of highly liquid market, the volumes arehuge and hence the losses are generally minimalwith an immediate entry/exit.



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HOW FUTURES WILL HELP YOURBUSINESS? Anticipate profit margins

Improve your marketing plan

Maintain or increase your customer base withinnovative pricing contracts

Reduce the cost of storing commodities



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FUNCTIONS OF THE COMEXES:

Membership Trading, Clearing and Settlement

Margining and Surveillance

Disputes and Redressal Mechanism

Disciplinary Procedures

Emergency Measures Suspension and Defaults



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GOVERNANCE OF THE COMEXES:

AoP, Limited Companies Mutualised and Demutualised

Board Managed

3 Public Representatives and oneGovernment Nominee

Day to day affairs left to professionals Various Committees to manage the

operations


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Regulation

System of Regulation 3-tier


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Central Govt: broad policy oncommodities, territorial area andrecognition of exchange

FMC: approval of exchange rules;

permission for trading in contracts;monitor market conditions;

Exchange: forum to conduct trade;

records contracts, execution,settlement, payment etc.

Regulatory Measures


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Hedgers: those with underlyinginterest in specific delivery or readydelivery contracts, and use futures toinsure against adverse price

movement Speculators: may not have an

interest in ready contract, but see

opportunity of price movementfavourable to them; provide usefuleconomic function

Safeguard / Regulatory Measures


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Limit on open position

Limit on price fluctuation Special margin

Minimum/ maximum prices

Extreme steps: skipping trading;closing market; closing out

contracts

Recent Developments


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Futures / forward trading in mostcommodities allowed

Three nationwide online tradingexchanges in operation

Trading volumes expandingSeveral new products launched

Autonomy for FMC on the cards FCRA amendment

Commodity RiskManagement


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Identifying key risksWeather conditions

Government policiesDemand and supply

conditions

RISK MANAGEMENT


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WHAT IS RISK MANAGEMENT? Risk Management is to assess the overall risk of

the Exchange in respect of one or more derivativeproducts to ensure default-free trading, clearingand settlement mechanism

Risk mitigation must


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Stakeholders today face greater price

risk than ever before; Trade sentimentchanged; Longer the process, greaterthe risk; Someone must assume the

risk in every economic activity;

Enter futures trading

RISK MANAGEMENT


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HOW ARE COMMODITY RISKS ASSESSED?

Every uncertainty is exposed to risk.

Commodities, by their very nature, have risks.

Inherent risks associated with the

commodities Most of the agricultural commodities undergo

change in quality over a period of time (shell

life). Futuristic Risk due to internal, external and

uncontrollable factors.

Delivery risk.

RISK MANAGEMENT


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FACTORS CONTRIBUTING TO RISK:

Fungibility Production vagaries of monsoon

Government interference

Transportation and Warehousing

Effect of substitute products

RISK MANAGEMENT


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HOW IS RISK ASCERTAINED BY THEEXCHANGE? Risk arising out of the

daily market fluctuation

speculative transactions

members open interest

illiquid markets forcing Exchange to go in formark-up prices

multi-contract, multi-commodity and multi-exchange.

RISK MANAGEMENT


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HOW ARE RISK MANAGEMENTINSTRUMENTS DESIGNED?

Circuit Filters

Circuit Breakers

Margin calls Regular

Occasional (Need-based)

Marked-to-market

Mark-up prices

RISK MANAGEMENT


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PRE-REQUSITIES FOR A GOOD RISKMANAGEMENT INSTRUMENT It should not suppress a healthy volume.

It should be in a position to segregate hedging

risk and speculative risk. It should be capable of implemented for

different categories of players at different times.

The risk should be based on the marketmovement (pulse of the market rather thanprice per se).

RISK MANAGEMENT


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PRE-REQUSIITES An adequate and efficient surveillance mechanism

goes hand in hand with the risk managementimplementation

It should function independently without fear or

favour. It should be capable of assessing the futuristic risk

in respect of contracts / members for facilitating

corrective measures.

RISK MANAGEMENT


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HOW RISK MANAGEMENT ISIMPLEMENTED? Creation of Trade Guarantee Fund.

Utilisation of Trade Guarantee Fund

Modus operandifor replenishing the TGF Online collection of margin.

Daily clearing

Tab on the price movements on real time basis. Monitoring the exposure of the members.

RISK MANAGEMENT


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HOW TO IMPLEMENT Assess the market at frequent intervals and take

corrective measures.

RISK MANAGEMENT


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RISK MANAGEMENT FOR TRADING Ensure collection of transaction slips immediately

after trade (not applicable in case of online trading) Ensure that the slips received / bid-offer rates are

in consonance with the prevailing rates.

Have strict vigil over out-trades trades donebeyond the quotes (as they affect the flow of slipsas well as real price discovery)

RISK MANAGEMENT


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RISK MANAGEMENT FOR TRADING If the trading does not take place due to abnormal

market behaviour, then re-open the trading withrealistic rates (called mark-up prices) and collectthe difference money immediately. This will avoid

potential default. Avoid circular trading as this will create unhealthy

and unreliable market conditions.

RISK MANAGEMENT


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RISK MANAGEMENT FOR TRADING .. It is preferred to impose margin on tapering basis

(based on the exposure / position of the members). Have check on Negotiated Deals.

RISK MANAGEMENT


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RISK MANAGEMENT FORDELIVERIES Despite being a hedged instrument, the Certified

Warehouse Receipt (CWR) in itself is subjected toprice risk rates prevailing on the date of

settlement to the actual handing over of CWR. Delivery margin from the buyer to cover the above

risk.

Risk arising out of delivery committed but notactually tendered by the seller..

Risk arising out of delivery allotted to the buyer but

not lifted.

RISK MANAGEMENT


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OTHER ASPECTS CONCERNING THE RISKMANAGEMENT:

Is there any optimum risk that can be ascertainedby the Exchange?

Risks associated with the constituents.

Risks associated with the CWRs of one Exchangebeing tendered for delivery in other Exchange.

Gross Exposure VsNet exposure concept.

Very negligible or nil deliveries being tendered.

RISK MANAGEMENT


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EFFECT OF RISK MANAGEMENT

Proper risk management facilitates default-free environment

Proper risk management ensures that

trades are done in an orderly manner. A sound risk management ensures that

even potential default cases are brought to

notice immediately.

RISK MANAGEMENT


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KEY TO TIMING YOUR TRADES When is the best time to buy or sell

When to use the futures market to hedge apurchase or sale

Which futures month to place a hedge

When to accept suppliers offer

Forward bids to your clients

Resale bids

Summary


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Commodity as an asset class

Commodity market functions and role Commodities traded

Regulations

Risk management

49459414 Commodity Markets

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Transcript of 49459414 Commodity Markets