commodities presentation
TRANSCRIPT
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Welcome to the WorldWelcome to the WorldWelcome to the WorldWelcome to the World
OfOfOfOf
Commodities TradingCommodities TradingCommodities TradingCommodities Trading
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"Commodities have become an attractiveinvestment in recent years, even for those whomay not know much about them but would like to
participate in the profit potential from dramaticprice advances posted by energy, grains, metalsand other commodities, lifting them to thehighest overall levels in more than 30 years."
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In Coming Years
India shall become
TheHub of Global Trading in Commodities
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Ministry of Consumer Affairs,
Food & Public Distribution
Forward MarketCommission
On-Line
Exchanges
Open Outcry
Exchanges
MCX
(Mumbai)
NMCE
(Abad)
NBOT
(Indore)
NCDEX
(Mumbai)
Structure of Market In India
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Worlds Major Commodities Exchanges
NCDEX
MCX
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COMMODITIES
MetalsMetals Oilseed
Complex
Oilseed
Complex
SoftsSofts Agri. Comm.Agri. Comm.
Crude / RefinedPalm Oil
Soy Oil
Castor Oil
Mustard Oil
Cotton
Sugar
Gur
Pepper
Guar Seed
Soy Bean
Jeera
Chilli
Turmeric
Etc..
Copper
Nickel
Tin
Crude Palm Oil
Mustard Seed
Castor Seed
Refined Soy Oil
Gold
Silver
Steel Copper
Zinc
Nickel
Lead &Aluminium
Commodities Segment wise (MCX & NCDEX)
EnergyEnergy
Brent crude
Sweet Crude oil
Furnace oil
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Why Commodities?
Commodities are easy to Understand and have positive correlation withInflation.
The Commodity market are global in nature , hence less risk for manipulation.
Every commodity have separate market in Itself and hence many such market
is simulated at one single screen. The trend in one commodity not necessarily
have correlation with the trend of other.
Historically Commodities have outperformed the Stock Market .
Diversification through a different asset class.
Low Margins 4% - 10% only
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(1)Speculation:
It facilitates speculation by providing opportunity to people, although not
involved with the commodity, to trade on the views in the movement of
commodity prices.
(2)Hedging:
For the people associated with commodities, the Futures market can
provide an effective hedging mechanism against price movements. For
example an oil-seed farmer may go short in oil-seed futures, thus lockinghis sale price and in the process hedging against any adverse price risks.
Also, there is a saying that Gold, is the safe haven. Thus, gold can be
used as a hedging tool against other investments.
Opportunities in the Commodity Futures
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(3)Arbitrage:
Traders may exploit arbitrage opportunities that arise on account of
different prices between the two exchanges or between different
maturities in the same underlying.
(4)Two Way Market Opportunities. Traders will benefit in a Bull or Bearmarket
(5)Spread Trading
Inter Commodity (Gold /silver, guar seed/guar gum) Intra Commodity Spreads (calendar Spreads)
(6)Lower margins compared to Equity Markets, gives scope to higher
exposure.
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Benefits of Commodities Futures Trading
Additional Investment/Trading opportunity
Diversification of Portfolio Asset Class
Lower Margins High leverage for traders
Hedging/ Arbitrage opportunities
Additional trading opportunity after 3.30 PM
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Pure Trading
Speculators in the futures
market can use different
strategies to take
advantage of rising and
declining prices. The most
common are known asGoing Long, GoingShort
As an Investment
Investors can build and
Diversify their Portfolio
Calendar Spread trading
Spreads involve taking
advantage of the price
difference between two
different contracts of the
same commodity
Arbitrage Opportunities
Inter Exchange (NCDEX &
MCX)
Spot -to- Futures
Alternative Ideas
Trading Strategies
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Commodity / Company Correlations
1. Higher Base Metal Prices have a positive impact on Companies producing
base metals such as Hindustan Copper / Sterlite Industries / Hindalco etc.
Whereas falling prices have an opposite effect.
2. Higher Gold/Silver prices have positive impact on Companies producing
Gold/Silver such as Barrick Gold, Newmount Mining & Anglogold Ashanti.
Whereas falling prices have an opposite effect.
3. Higher Crude prices have a positive impact on companies producing Crudesuch as ONGC / Cairn. Also, companies such as BPCL / HPCL margins
increases. But falling prices have an opposite effect.
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Dow Jones & Copper Correlation
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Dow Jones & Crude Correlation
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Nifty & Rupee Correlation
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Our Research Strengths
1. Strong research team with fundamental & technical analyststracking International & Agri commodities
2. Special Fortnightly Reports on Intl. & Agri Commodities along with
Corporate Reports on a daily basis.
3. Various products are currently being offered to our clients -Calendar Spreads, Positional Calls, Inter-Exchange Spread Callsetc.
4. Our Investor Education Series is primarily aimed towardseducating our investors.
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Thank YouThank YouThank YouThank You
Ricky Warrik (9873707700)Ricky Warrik (9873707700)Ricky Warrik (9873707700)Ricky Warrik (9873707700)