Trade strategy
It appears that speculators or operators choose commodities or contracts where the market could be influenced and extreme speculations possible. In view of extreme volatilities, the FMC directs the exchanges to impose restrictions on positions and raise margins on those commodities.
Consequently, the operators/speculators chose another commodity and start operating in a similar pattern. When FMC brings restrictions on those commodities, the operators once again move to the other commodities.
Likewise, the speculators are moving from one commodity to other (from methane to Urad to guar etc) where the market could be influenced either individually or with a group.
Beneficiaries: - So far the beneficiaries from the current nature of trading are
Exchangers: - making profit from mounting volumes
Arbitragers
Operators
In order to understand the extent of progress the trading the trading in Commodity Derivatives has made towards its specified objectives (price discovery and price risk management), the current trends are juxtaposed against the specification
Reasons for prevailing trade pattern:-
No wide spread participation of all stake holders of commodity markets. The actual benefits may be realized only when all the stake holders in commodity market including producers, traders, consumers etc trade actively in all major commodities like rice, wheat, cotton etc.
Investing in Commodity Market
Suppose An investor want to invest in the commodity Market and he/she wants to purchase steel from the market then he/she will go through following stages-
1. He/she must know general characteristics of steel
2. Categories of steel
3. He/she should be aware of global as well as Indian scenario
4. After considering the factor he/she should know which factor will
affect the demand and supply of steel.
The duty imposed on import of steel and its fractions also have an impact on steel prices.
The price trend in steel in Indian markets has been a function of World’s economic activity.
Prices of input materials of iron and steel such as power tariff, fright rates and coal prices, also contribute to the rise in the input costs for steel making.
It appears that speculators or operators choose commodities or contracts where the market could be influenced and extreme speculations possible. In view of extreme volatilities, the FMC directs the exchanges to impose restrictions on positions and raise margins on those commodities.
Consequently, the operators/speculators chose another commodity and start operating in a similar pattern. When FMC brings restrictions on those commodities, the operators once again move to the other commodities.
Likewise, the speculators are moving from one commodity to other (from methane to Urad to guar etc) where the market could be influenced either individually or with a group.
Beneficiaries: - So far the beneficiaries from the current nature of trading are
Exchangers: - making profit from mounting volumes
Arbitragers
Operators
In order to understand the extent of progress the trading the trading in Commodity Derivatives has made towards its specified objectives (price discovery and price risk management), the current trends are juxtaposed against the specification
Reasons for prevailing trade pattern:-
No wide spread participation of all stake holders of commodity markets. The actual benefits may be realized only when all the stake holders in commodity market including producers, traders, consumers etc trade actively in all major commodities like rice, wheat, cotton etc.
Investing in Commodity Market
Suppose An investor want to invest in the commodity Market and he/she wants to purchase steel from the market then he/she will go through following stages-
1. He/she must know general characteristics of steel
2. Categories of steel
3. He/she should be aware of global as well as Indian scenario
4. After considering the factor he/she should know which factor will
affect the demand and supply of steel.
The duty imposed on import of steel and its fractions also have an impact on steel prices.
The price trend in steel in Indian markets has been a function of World’s economic activity.
Prices of input materials of iron and steel such as power tariff, fright rates and coal prices, also contribute to the rise in the input costs for steel making.