International Commodity

Exchanges. auction

• The United States, Japan, United Kingdom, Brazil, Australia, Singapore are homes to leading commodity futures exchanges in the world.

• commodity exchange the primary role is to provide transparency and liquidity in its contracts to its members, clients and market participants like farmers, corporate, small business men, financial service providers, international trading firms and speculators for price delivery, risk management and investment.

Worlds Major Commodity Exchanges:

• 1. The New York Mercantile Exchange (NYMEX)• The New York Mercantile Exchange is the world’s biggest exchange

for trading in physical commodity futures. • Commodities traded – Light Sweet Crude Oil, Natural gas, Heating

Oil, Gasoline, Electricity, Propane, Gold, Silver, Copper, Aluminum, Platinum, Palladium, etc.

• 2. London Metal Exchange (LME)• The Exchange was formed in 1877 as a direct consequence of the

industrial revolution witnessed in Britain in the 19th Century. The exchange trades 24 hours a day. • Commodities Traded – Aluminum, Copper, Nickel, Lead, Tin, Zinc,

Aluminum Alloy, North American Special Aluminum Alloy (NASAAC), Polypropylene, Linear Low Density Polyethylene, etc.

• 3. The Chicago Board of Trade (CBOT)• The first commodity exchange established on the world was the

Chicago Board of Trade (CBOT). During the year 1848 by a group of Chicago merchants who were keen to establish a central market place for trade. • Commodities traded Corn, Soybeans, Soybean Oil, Soybean Meal,

Wheat, Oats, Ethanol, Rough Rice, Gold, and Silver etc.

• 4. Tokyo Commodity Exchange (TOCOM)• The Tokyo Commodity Exchange (TOCOM) is the second largest

commodity futures exchange in the world. It has made rapid advancements in commodity trading globally since inception 20 years back. • Commodities Traded. Gasoline, Kerosene, Crude Oil, Gold, Silver,

Platinum, Palladium, Aluminum, Rubber, Etc.

• 5. Chicago Mercantile Exchange (CME)• Chicago Mercantile Exchange (CME) is the largest futures exchange in

the US and the largest futures clearing house in the world for futures and options trading. Formed in 1898 primarily to trade in agricultural commodities. • Commodities Traded. Butter, Milk, Diammonium Phosphate, Feeder

cattle, Frozen Pork bellies, Lean Hogs, live Cattle, Non-fat Dry Milk, Urea, Urea Ammonium Nitrate, Etc.

auction

• An auction is a process of buying and selling goods or services by offering them up for bid, taking bids, and then selling the item to the highest bidder. In economic theory, an auction may refer to any mechanism or set of trading rules for exchange.

•When a certain item is sold in public through competitive bidding by the buyers, it is known as an auction. This term was derived out of the word augeo, which is Latin for 'to increase'. There are different types of auctions. Discussed below are the various kinds of auction a seller can choose from.

Depending on the Method of Conduction• » English Auction

Also known as an open ascending price auction, this method is highly used for selling real estate, antique items, paintings. participants write their bids on a sheet of paper placed beside the item to be sold. The person writing the highest bid takes the item along.

• » Multi-par AuctionLand, farms, timberland, etc., are generally sold through this method. Auctioneer may choose to derive profit by selling portions of land to multiple buyers.

• » Sealed First-price AuctionThis method gives the seller an option to secretly study the bids and decide along with the auctioneer the best deal for the item. Government contracts, tenders, etc., are usually issued using this method.

• » Dutch AuctionItems which can easily perish, like fish and other eatables, are sometimes sold by this method. Here, the auctioneer announces an extremely high bid which is subsequently lowered till a participant agrees to pay a particular bid. It is not widely used for the purpose of auctioning.

• » Online AuctionThe Internet is now used for auctioning several products and services. Details of products and their images are available on the auction website.

•» Catalog AuctionWhen it is not feasible to gather the items for sale at a single place, simply because all are scattered in different locations, this method is used. A catalog containing list of goods to be auctioned is available there for the bidders.

• Auctioning is frequently done for real estate, antique items, livestock, businesses, cars, holiday packages, etc. Each method mentioned above is different in terms of time required for conduction and pricing.

•Thank you!!!