8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 1/58
Study on
“STUDY ON PERCEPTION OF INVESTORS TOWARDSCOMMODITY MARKET”
Submitted in Partial Fulfillment of the Requirements of
ALL INDIA MANAGEMENT ASSOCIATION
POST GRADUATION DIPLOMA IN MANAGEMENT
By
SWATI SMITI NANDA
REG. No: 420820511
Under the Guidance of
Dr. Ranganatham.G
Acharya Institute of Management &Sciences
1st Cross, 1st Stage, Peenya Industrial AreaBangalore – 560 058
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 2/58
2008 - 2010
DECLARATION
I, Swati Smiti Nanda, here by declare that this dissertation titled, STUDY ON
PERCEPTION OF INVESTORS TOWARDS COMMODITY MARKET is based
on the original project study conducted by me under the guidance of Dr.
Ranganatham.G
This has not been submitted earlier for the award of any other degree /
diploma by Acharya Institute of Management and Sciences.
Place: Bangalore
Date: SWATI SMITI NANDA
2
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 3/58
CERTIFICATE FROM THE GUIDE
Certified that this dissertation STUDY ON PERCEPTION OF INVESTORS
TOWARDS COMMODITY MARKET is based on an original project study
conducted by SWATI SMITI NANDA of IV Semester PGDM under my guidance.
This dissertation has not formed the basis for the award of any other degree / diploma by
Acharya Institute of Management and Science.
Place: Bangalore
Date: Dr. Ranganatham.G
3
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 4/58
LIST OF CONTENTS
CHAPTERS CONTENTSPAGENO.
1 INTRODUCTIONIntroduction
2 RESEARCH METHODOLOGY
Statement of the ProblemScope of the StudyObjective of the studyLiterature ReviewResearch designPopulation and samplingtechniqueSample designLimitations of StudyChapter Layout
3 INDUSTRY PROFILE
4 ANALYSIS AND INTERPRETATIONOF DATA
5 FINDINGS
CONCLUSIONS AND SUGGESTIONS
BIBLIOGRAPHY
4
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 5/58
ACKNOWLEDGEMENT
I would like to thank Prof. Ms. Kiran Reddy, Principal, Acharya Institute of
Management and Sciences, Bangalore for giving me an opportunity to conduct this
study.
I would also like o express my sincere thanks to Dr. Ranganatham.G Faculty,MBA
Department, Acharya Institute of Management and Sciences, Bangalore for providing
necessary insight and guidance.
I would also like to express my sincere thanks to my parents who gave me the necessary
financial and moral support during the course of my project. Last but not the least; I am
grateful to my respondents who have provided me valuable information needed for the
successful completion of this project.
Place: Bangalore Swati Smiti Nanda
Date:
5
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 6/58
CERTIFICATE
Certified that this dissertation titled STUDY ON PERCEPTION OF INVESTORS
TOWARDS COMMODITY MARKET is based on the study conducted by SWATI
SMITI NANDA of IV Semester PGDM under the guidance of . Dr.
Ranganatham.G.
This dissertation is based on the original project study undergone and has not formed the
basis for the award of any other degree/diploma by Bangalore University or any other
University.
Dr M. Ranganathan Ms. Kiran Reddy
Professor - PGDM Principal
Place: Bangalore Place: Bangalore
Date: Date:
6
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 7/58
CHAPTER-1 INTRODUCTION
7
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 8/58
1.1 GENERAL INTRODUCTION
Commodity markets are markets where raw or primary products are exchanged. These
raw commodities are traded on regulated commodities exchanges, in which they are
bought and sold in standardized contracts.
The modern commodity markets have their roots in the trading of agricultural products.
While wheat and corn, cattle and pigs, were widely traded using standard instruments in
the 19th century in the United States, other basic foodstuffs such as soybeans and wheat
were only added quite recently in most markets. For a commodity market to be
established there must be very broad consensus on the variations in the product that
make it acceptable for one purpose or another.
The economic impact of the development of commodity markets is hard to over-
estimate. Through the 19th century "the exchanges became effective spokesmen for, and
innovators of, improvements in transportation, warehousing, and financing, which paved
the way to expanded interstate and international trade."
1.2 History of commodity markets
The history of organized commodity derivatives in India goes back to the nineteenth
century when the Cotton Trade Association started futures trading in 1875, barely about
a decade after the commodity derivatives started in Chicago. Over time the derivatives
market developed in several other commodities in India. Following cotton, derivatives
trading started in oilseeds in Bombay (1900), raw jute and jute goods in Calcutta (1912),
wheat in Hapur (1913) and in Bullion in Bombay (1920). However, many feared that
derivatives fuelled unnecessary speculation in essential commodities, and were
detrimental to the healthy functioning of the markets for the underlying commodities,
and hence to the farmers. With a view to restricting speculative activity in cotton market,
the Government of Bombay prohibited options business in cotton in 1939. Later in 1943,
forward trading was prohibited in oilseeds and some other commodities including food-
grains, spices, vegetable oils, sugar and cloth. After Independence, the Parliament
passed Forward Contracts (Regulation) Act, 1952 which regulated forward contracts in
8
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 10/58
market, various financial instruments based on commodities are traded. These financial
instruments such as 'futures' are traded in exchanges like Multi Commodity Exchange
(MCX) and National Commodity Derivatives Exchange (NCDEX).
India is among the top-5 producers of most of the commodities, in addition to being a
major consumer of bullion and energy products. Agriculture contributes about 22% to
the GDP of the Indian economy. It employees around 57% of the labour force on a total
of 163 million hectares of land. Agriculture sector is an important factor in achieving a
GDP growth of 8-10%. All this indicates that India can be promoted as a major hub for
trading of commodity derivatives. It is unfortunate that the policies of FMC during the
most of 1950s to 1980s suppressed the very markets it was supposed to encourage and
nurture to grow with times. It was a mistake other emerging economies of the world
would want to avoid. However, it is not in India alone that derivatives were suspected of
creating too much speculation that would be to the detriment of the healthy growth of
the markets and the farmers. Such suspicions might normally arise due to a
misunderstanding of the characteristics and role of derivative product.
It is important to understand why commodity derivatives are required and the role they
can play in risk management. It is common knowledge that prices of commodities,
metals, shares and currencies fluctuate over time. The possibility of adverse price
changes in future creates risk for businesses.
Derivatives are used to reduce or eliminate price risk arising from unforeseen price
changes. A derivative is a financial contract whose price depends on, or is derived from,
the price of another asset.
Two important derivatives are futures and options.
Commodity Futures Contracts: A futures contract is an agreement for buying or selling
a commodity for a predetermined delivery price at a specific future time. Futures are
standardized contracts that are traded on organized futures exchanges that ensure
performance of the contracts and thus remove the default risk. The commodity futures
have existed since the Chicago Board of Trade (CBOT) was established in 1848 to bring
farmers and merchants together. The major function of futures markets is to transfer
price risk from hedgers to speculators. For example, suppose a farmer is expecting his
10
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 11/58
crop of wheat to be ready in two months time, but is worried that the price of wheat may
decline in this period. In order to minimize his risk, he can enter into a futures contract
to sell his crop in two months’ time at a price determined now. This way he is able to
hedge his risk arising from a possible adverse change in the price of his Commodity.
Commodity Options contracts: Like futures, options are also financial instruments used
for hedging and speculation. The commodity option holder has the right, but not the
obligation, to buy (or sell) a specific quantity of a commodity at a specified price on or
before a specified date. Option contracts involve two parties – the seller of the option
writes the option in favour of the buyer (holder) who pays a certain premium to the
seller as a price for the option. There are two types of commodity options: a ‘call’ option
gives the holder a right to buy a commodity at an agreed price, while a ‘put’ option gives
the holder a right to sell a commodity at an agreed price on or before a specified date
(called expiry date).
The option holder will exercise the option only if it is beneficial to him; otherwise he
will let the option lapse. For example, suppose a farmer buys a put option to sell 100
Quintals of wheat at a price of $25 per quintal and pays a ‘premium’ of $0.5 per quintal
(or a total of $50). If the price of wheat declines to say $20 before expiry, the farmer will
exercise his option and sell his wheat at the agreed price of $25 per quintal. However, if
the market price of wheat increases to say $30 per quintal, it would be advantageous for
the farmer to sell it directly in the open market at the spot price, rather than exercise his
option to sell at $25 per quintal.
Derivative and future are basically of 3 types:
swaps
Forwards and Futures
Options
11
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 13/58
Exchange Abbreviation Location Product Types
CME Group CME ChicagoAgricultural, Biofuels,
Precious Metals
Chicago Climate
ExchangeCCX Chicago Emissions
New York Board of Trade NYBOT New York Agricultural, Biofuels
New York Mercantile
Exchange NYMEX New York
Energy, Agricultural,
Industrial Metals, Precious
Metals
Dubai Gold &
Commodities ExchangeDGCX Dubai Precious Metals
Multi Commodity
ExchangeMCX India
Energy, Precious Metals,
Metals, Agricultural
National Commodity and
Derivatives Exchange NCDEX Mumbai All
Purpose:
Commodity market is a market where raw or primary products are exchanged. These
raw commodities are traded on regulated commodities exchanges, in which they are
13
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 14/58
bought and sold as standardized contracts. The modern commodity market have their
roots in the trading of agricultural products. While wheat and corn, cattle and pigs, were
widely traded using standard instruments in 19th century in the United States, other
basic foodstuff such as soybeans and wheat were only added quality recently in most
market. For a commodity market to be established there must be very broad consensus
on the variations in the product that make it acceptable for one purpose or another.
The economic impact of the development of commodity market is hard to over-estimate.
Through the 19th century “the exchanges became effective transportation, warehousing
and financing, which paved the way to expanded interstate and international trade.”
AIM
To analyze and understand the perception of investors towards Commodity market.
Objectives of the study
• To understand and analyze the commodity markets.
• To know the perception of investor about commodity market.
• To study the trend of commodity market.
•
To know in depth the online trading system and challenges entailed.
Key Question
• Are you aware of commodity market?
• Why are you not investing in commodities sources?
• Is there any brokerage issue that results in non-trading in commodities?
Hypothesis of the study:
Hypothesis 1
H0: Trading in commodity lead to growth in inflation
H1: Trading in commodity will not lead to growth in inflation
14
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 15/58
Hypothesis 2
Ho: Investment in commodities is beneficial for the retail investor.
H1: Investment in commodities is not beneficial for the retail investor .
Research Methodology
Stage 1: Literature Research
A comprehensive review of relevant literature including computer assistance search will
be undertaken in order to develop an understanding of concept and previous work
related to Commodity market and its opportunities.
Stage 2: Research Design
The type of research followed would be descriptive and analytical.
15
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 16/58
CHAPTER-2
RESEARCH METHODOLOGY
16
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 17/58
RESEARCH METHODOLOGY
4.1 INTRODUCTION
Commodity market is the latest market introduced in India and people are not yet aware
of commodity trading very much. In the international market the investment required for
the commodity market is huge and brokers should follow such steps so that they could
generate decent profits for their clients. But the problem is that these brokers are least
bothered about the profit generation of the clients and they are just concerned about their
brokerage and make maximum profit. Thus these brokers do not advice their clients in a
proper way and are likely to lose their clients and even these clients lose their faith on
brokers as well as commodity market.
4.2 STATEMENT OF RESEARCH PROBLEM.
As the investment required in commodity market is huge, people are hesitant to invest in
commodity market .Inadequacy in guidance provided by brokers’ may not facilitate
proper generation of profits for the clients. This may also contribute to the slackness in
investment in this sector especially when clients are also not well trained about the
market fluctuations. Clients are not advised properly regarding the generation of profit in
the international market and also in Indian market.
4.3 STATEMENT OF RESEARCH OBJECTIVE
The study conducted on this problem with reference to customers has the following
objectives
1. to make the people well aware of commodity market at both the international as
well as Indian market.
2. To address the problem/issues which are acting as an obstracle
2. To ascertain the awareness levels of people with respect to commodities markets.
3. To identify the problems/issues which are acting as an obstacle to trading.
4.4 STATEMENT OF RESEARCH DESIGN AND METHODOLOGY
The study is based on survey technique. The study consists of analysis about customer’s
awareness of and satisfaction regarding the rate of return earned in the commodities
17
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 18/58
market. For the purpose of the study, 100 customers were picked up at random and their
views solicited on different parameters. The methodology adopted includes
• Questionnaire
• Discussions with the concerned respondents to supplement the questionnaire
4.5- SOURCES OF DATA :
PRIMARY DATA:
Primary data is collected through:
• Telephone conversations.
• Questionnaire
SECONDARY DATA
Secondary data is collected from:
• Journals
• Magazines
• Internet
Sample Size: 100 customers of Bangalore city
Sampling Method: Convenient random sampling
Stage4: Measurement Procedure
The data collected through questionnaire will be represented in tabular and graphical
form with the help of appropriate statistical tools.
Stage 5: Sampling
Sampling Plan: Sampling is nothing but a small portion of population to show the
quality of the whole. Sampling can be classified into three sections as mentioned below.Sampling Type: The study type is analytical, quantitative and historical.
Sampling Size : It refers to the total number of people including in the sample plan. In
this project, sample size is 100 customers in Bangalore.
Sampling Unit : Sampling unit refers to the sample target. In this project, the sample
units are the investors who invest in Commodity market.
18
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 19/58
4.5- SCOPE OF STUDY
The research that is being conducted by me will be useful in the following respect-
1-This will help the company, how to make people aware about derivatives &
commodity market by imparting best education.
2-This will help the company to know the customer’s preferences and channelize it
towards derivatives & commodities.
3-This will help the company to frame effective Marketing Strategy.
4.6- LIMITATIONS OF THE STUDY
Personal Bias
People may have personal bias towards particular investment option so they may not
give correct information and due to which conclusion may be derived.
Time Limit:
The time duration of the research is short and that is why the information is not fully
covered.
Area:
The area was limited to Bangalore city only, so we can not know the degree of the
literacy of commodity market and forex market outside the city limit.
Sample Size:
The last limitation is Sample size i.e. 100 only; due to which we may not get the proper
results.
Formulation of hypothisis:
• Trading in commodities lead to growth in inflation.
• Investment in commodities is beneficial for the retail investor.
Methodology:
As already stated above it is a descriptive and analytical research,therefore following
will be include in my methodology.
• Detail study on commodity.
• Analyyzing the trend of commodity market and its effect on economy.
19
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 20/58
• Studying the effect of economic factors and government policies on commodity
market.
• Various factors of commodities that are influencing the economy.
Analysis of data:
Table2. Instruments in which people are trading.
Instruments Nos. Percentage(%)
Equity 46 46
Derivatves 19 19
Commodities 35 35
Interpretation:
From the data I have collected it shows that more people like to trade in equities then
in commodies .
20
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 22/58
News Paper 8 8
Internet 10 5
Advice of Friends 13 3
Advice of CA/Tax
Consultants
9 7
Well-knownStock Broking
Houses
15 2
Business Magazines 7 9
Table4. Are you satisfied with trading in commodity market?
Option Percentage(%)
Very Satisfied 20
Satisfied 34
Neutral 18
Not satisfied 26Very Dissatsfied 2
Total 100
Interpreation:
As per the data collected 34 percent of people are satisfied with trading in
commodities.And 20 percent of people are very satisfied while trading in
commodities.And only 2 percent people are dissatisfied with trading in commodities.
Table5. Belief of people about volatility of commodity market
Option Percentage(%)
Strongly Agree 62
Strongly Disagree 38
Total 100
22
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 23/58
Interpreation:
From the data I collected 62 percent people are strongly agree that commodity
market is volatile and 38 percent of people believe that commodity market is not
volatile.
Table6. If yes ,Rank the following product,the most volatile in a market
Commodity Rank
Bullion 1Spices 3
Oil 2
Fiber 6
Metal 4
F&O 5
Interpreation:
When I asked investor rank the above product as per their volatility they rank Bullion as
1 then oil then spices then metal etc. As per perception of the investor Bullion is the
most volatile product in the market.
Table7. Factors affect the volatility of the commodity market
23
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 24/58
Option Percentage(%)
GDP growth rate 9
Economy Global Trend 15
Agricultural Production 28
Inflation Rate 10
Seasonal Variation 38Total 100
Interpreation:
There are certain factors which affect the volatility of the commodity market. From the
above factors seasonal variation is the one factor which affect the volatility of the
commodity market most. Agricultural Production is the second factor which also effect
the volatility of the commodity market. There are other factors which effect the volatility
are GDP growth rate, Inflation Rate etc.
Table8. Part of saving people invest in commodity market
Option Percentage(%) Frequency
Less than 25% 49 49
25%to50% 31 31
50%to75% 17 17
24
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 25/58
Above 75% 3 3
Total 100 100
Interpreation:
When I asked people that what part of their income they spent in commodity market
then only 3 percent of sample population invest above 75 percent of their saving in
commodity market.17 percent of sample population invest 50-75 percent of their saving
in commodity market.31 percent of sample population like to invest 25-50 of their
saving in commodity market.49 percent of sample population like to invest less than 25
percent of their saving in commodity market. So from this we can conclude than more
number of people spent very less amount of their saving in commodity market.
Table9. On an average people expect return from commodity market
Option Percentage(%)
10%to15% 6
15%to20% 16
20%to30% 26
More than 30% 52
25
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 27/58
Interpreation:
As per data collected 44 percent of people are satisfied with their return and 10 percent
of people are very dissatisfied with their return.18 percent of people are very satisfied
with their return and 16 percent of people are dissatisfied with their return.
27
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 29/58
• People who were scared to invest in commodity market can be or convinced and
made to trade in the commodity market and also use technical and fundamental
analysis when proper training is given.
• People can be converted to invest in the international market when advices are
given regarding the market landings.And also when the clients are given daily
updates,they start to trade regularly.This generates revenue for the organization.
29
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 31/58
A. ORIGIN AND DEVELOPMENT OF THE INDUSTRY
Commodity money and commodity markets in a crude early form are believed to have
originated in Sumer where small baked clay tokens in the shape of sheep or goats were
used in trade. Sealed in clay vessels with a certain number of such tokens, with that
number written on the outside, they represented a promise to deliver that number. This
made them a form of commodity money - more than an "I.O.U." but less than a
guarantee by a nation-state or bank. However, they were also known to contain promises
of time and date of delivery - this made them like a modern futures contract. Regardless
of the details, it was only possible to verify the number of tokens inside by shaking the
vessel or by breaking it, at which point the number or terms written on the outside
became subject to doubt. Eventually the tokens disappeared, but the contracts remained
on flat tablets. This represented the first system of commodity accounting.
However, the Commodity status of living things is always subject to doubt - it was hard
to validate the health or existence of sheep or goats. Excuses for non-delivery were not
unknown, and there are recovered Sumerian letters that complain of sickly goats, sheep
that had already been fleeced, etc.
If a seller's reputation was good, individual "backers" or "bankers" could decide to take
the risk of "clearing" a trade. The observation that trust is always required between
market participants later led to credit money. But until relatively modern times,
communication and credit were primitive.
Classical civilizations built complex global markets trading gold or silver for spices,
cloth, wood and weapons, most of which had standards of quality and timeliness.
Considering the many hazards of climate, piracy, theft and abuse of military fiat by
rulers of kingdoms along the trade routes, it was a major focus of these civilizations to
keep markets open and trading in these scarce commodities. Reputation and clearing
became central concerns, and the states which could handle them most effectively
31
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 34/58
STRUCTURE OF COMMODITY MARKET
34
Ministry of Consumer Affairs
FMC(ForwardMarketCommission)
Commodity Exchange
National Exchanges Regional Exchange
NCDEX
MCX
NMCE NBOT
20ReasonalStock Exchange
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 35/58
Commodity Exchange
As commerce and industry have matured, each craft developed a vocabulary that
uniquely describes its products, technology, and business practices. Often, these words
seem incomprehensible to the layman. The terms that are central to the New York
Mercantile Exchange can at times seem formidable, especially those pertaining to our
industry, futures and options, as well as those of our principal customers, energy and
metals producers, vendors, and consumers.
The New York Mercantile Exchange, Inc., offers trading in futures and options on crude
oil, heating oil, unleaded gasoline, natural gas, electricity, gold, silver, copper,
aluminum, platinum, and the Euro Top 100® index; futures on the FTSE Euro top 300®
index; and options on propane, palladium; and the heating oil/crude oil and gasoline/
crude oil price differential.
In the lingo of the institution, “sweet crude” is not the exclamation of an oil driller who
has just brought in a successful well, wet barrels are different from paper barrels, mogas
is something most people use everyday, hallmark is not a brand of greeting card, a lease
does not involve real estate, fine weight is not the result of a diet program, and contango
is not a dance step.
This short lexicon is not meant to be a comprehensive dictionary; its aim is to foster a
better understanding of our business by the trading community, our customers, and the
public at large.
The Exchange’s public information office makes information available 24 hours a day
through phone systems which put you in touch with vital Exchange information faster
35
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 37/58
NCDEX (NATIONAL COMMODITIES AND DERIVATIVES EXCHANGE)
NCDEX started working on 15th December, 2003. This exchange provides facilities to
their trading and clearing member at different 130 centers for contract.
In commodity market the main participants are speculators, hedgers and arbitragers.
FACILITIES PROVIDED BY NCDEX
NCDEX has developed facility for checking of commodity and also provides a
wear house facility
By collaborating with industrial partners, industrial companies, news agencies,
banks and developers of kiosk network NCDEX is able to provide current rates
and contracts rate.
To prepare guidelines related to special products of securitization NCDEX works
with bank.
To avail farmers from risk of fluctuation in prices NCDEX provides special
services for agricultural.
NCDEX is working with tax officer to make clear different types of sales and
service.
37
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 42/58
details: Symbol, Expiry, price quotation unit, buy qty, buy price, sell price, sell qty, last
traded price, D.P.R, volume (in 000’s), value (in lac),% change, average trade price,
high, low, open, close & open interest.
New York Mercantile Exchange (NYMEX)
The New York Mercantile Exchange (NYMEX) is the world's largest physical
commodity futures exchange, located in New York City. Its two principal divisions are
the New York Mercantile Exchange and Commodity Exchange, Inc (COMEX) which
were once separate but are now merged. The parent company of the New York
Mercantile Exchange, Inc., NYMEX Holdings, Inc. became listed on the New York
Stock Exchange on November 17, 2006, under the ticker symbol NMX. Less than two
years later, on August 22, 2008, NYMEX Holdings was formally acquired by CME
Group (symbol: CME) and the NMX symbol was de-listed.
The New York Mercantile Exchange handles billions of dollars worth of energy
products, metals, and other commodities being bought and sold on the trading floor and
the overnight electronic trading computer systems. The prices quoted for transactions on
the exchange are the basis for prices that people pay for various commodities throughout
the world.
The floor of the NYMEX is regulated by the Commodity Futures Trading Commission,
an independent agency of the United States government. Each individual company that
trades on the exchange must send its own independent brokers. Therefore, a few
employees on the floor of the exchange represent a big corporation and the exchange
employees only record the transactions and have nothing to do with the actual trade. The
42
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 43/58
NYMEX is one of the few exchanges in the world to maintain the open outcry system,
where traders employ shouting and complex hand gestures on the physical trading floor.
ONLINE TRADING
43
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 51/58
Turmeric Urad
V-797
KapasWheat
Yellow
Peas
Yellow Red
Maize
Base Metals
Electrolytic Copper Cathode
Mild Steel Ingots
Sponge Iron
Precious MetalsGold
Silver
NCDEX Energy
Brent Crude Oil
Furnace Oil
51
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 52/58
CHAPTER-4
SUMMARY AND CONCLUSIONS
52
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 53/58
OBSERVATION
People need to be made aware of commodity market.
Clients who are scared to invest in Commodity market can be convinced and
made to trade in the forex market, bullions and crude oil and also use technical
and fundamental analysis when proper training is given.
Clients can be convinced to invest in the international market when advices are
given regarding the market landings. And also when the clients are given daily
updates, they start to trade regularly. This generates revenue for the organization.
5.2 CONCLUSIONS AND RECOMMENDATIONS
According to my observations and understanding I would like to highlight the following
points which may enable them to serve their clients better.
• The organization can direct extra efforts in its promotional activities as the
commodity market is a recent market in India and people are not much aware of it.
• Since most of the people are investing in fixed return Instruments to reduce risk
and secure higher returns, they have to be educated of the benefits of trading
aggressively in the commodities market.
• People generally want to take trading decisions independently or under the
guidance of Friends or Well Known Stock Broking Houses. To specifically
target the customer segments to win their trust and confidence by using trained
executives to enhance their brand image.
53
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 55/58
b) Broker
c) News Channel
d) News Paper
e) Internet
a) f. Advice of friends
b) g. Well known stock Broking Houses
c) h. Business Magazine
4. Are you satisfied with the trading in commodity market?
a) Very satisfied
b) Satisfied
c) Not satisfied
d) Very Dissatisfied
5. Do you believe that commodity market is volatile?
a) Strongly Agree
b) Strongly Disagree
6. If yes, Rank the following products, the most volatile in a market?
COMMODITY RANK
Bullion
Spices
Oil
Fiber
MetalF & O
7. Which of the following factor affects the volatility of the commodity market?
a) GDP growth rate
b) Economy Global Trend
55
8/7/2019 swati nanda (2)
http://slidepdf.com/reader/full/swati-nanda-2 58/58
BIBLIOGRAPHY
BOOKS:
TECHNICAL ANALYSIS BY MAGGI.
MARKET WIZARDS BY JACK SWAGGER.
LISTS OF WEBSITES:
WWW.EQUIS.COM
WWW.GOOGLE.COM
WWW.KERFORD.CO.UK
WWW.WIKIPEDIA.COM
WWW.INVESTOPEDIA.COM.
RELEVANT INFORMATION FROM OFFICE BROCHUERS/WEBSITES.
Recommended