commodities presentation

8/14/2019 Commodities Presentation

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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)

[email protected]

commodities presentation

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