Can we ban the online commodity trading?

D

deepakraam

Deepak Narayanan
Inflation in India stands @ 6.68% on the WPI.All the essential commodities have seen a hike of 10% from Jan 2006.Govt has banned trading on wheat and some cereals last year.Ppl are trying to put a ban on online commodity trading itself.Will this measure help in bringing down the inflation?Almost in all the countries commodities are traded like stocks.Moreover,when the oil prices are trading above $100/barrel,the prices are bound to increase.With the agriculture production abysmally low,prices are sure to increase.So the commodity contribution to the price increase is very low.Moreover,proper hedging will give a better price for the farmers.So should we ban the online commodity trading?

Pour your thoughts.


-Deepak.
 
deepakraam said:
Inflation in India stands @ 6.68% on the WPI.All the essential commodities have seen a hike of 10% from Jan 2006.Govt has banned trading on wheat and some cereals last year.Ppl are trying to put a ban on online commodity trading itself.Will this measure help in bringing down the inflation?Almost in all the countries commodities are traded like stocks.Moreover,when the oil prices are trading above $100/barrel,the prices are bound to increase.With the agriculture production abysmally low,prices are sure to increase.So the commodity contribution to the price increase is very low.Moreover,proper hedging will give a better price for the farmers.So should we ban the online commodity trading?

Pour your thoughts.


-Deepak.
Click to expand...



I think banning the commodiy trading will not effect anything It is just like shooting the messenger commodity trading only provides us the better way to manage the risk more than that it is nothing it is good source of hedging risk


Main cause of increase in the commodty tradding is due to shortage of food grains through out the world and as far as oil is concerne it is because of oil cartel opec which inspite of increasing prices is not increasing its production
 
deepakraam said:
Inflation in India stands @ 6.68% on the WPI.All the essential commodities have seen a hike of 10% from Jan 2006.Govt has banned trading on wheat and some cereals last year.Ppl are trying to put a ban on online commodity trading itself.Will this measure help in bringing down the inflation?Almost in all the countries commodities are traded like stocks.Moreover,when the oil prices are trading above $100/barrel,the prices are bound to increase.With the agriculture production abysmally low,prices are sure to increase.So the commodity contribution to the price increase is very low.Moreover,proper hedging will give a better price for the farmers.So should we ban the online commodity trading?

Pour your thoughts.


-Deepak.
Click to expand...

no instead of blaming the online trading the govt should take necessary steps to control the price hike and stop blame game
 
banning the commodity trading (online) wont help because the online platform provides a vital element for any market i.e liquidity and that mean indifference. One can ponder on banning futures for instance but the Americans have tried doing the same in the lumber market with horrible results. So there is no question of banning anything instead a well monitored regulation is required.
Secondly the prices take a hit not because of online traders per say but due to speculators who generally are HNI of big fund houses
 
Baning online commodity trading will be a stupid move. It will make us look like bunh of fools, who are afraid of our own shadows
 
To be able to indulge in online commodity trading, one essentially needs to be connected to the exchange directly or then a member of the exchange. There are a large number of brokers and brokerage firms that offer online trading of commodities. With this connection one is also trained in the process of making trades on line.

As soon as one makes a trading request it is registered with the host trading party and the process of preparing the contract commences simultaneously. The trading host server also sends back an instant request to confirm the trade.
 
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