Introduction to Commodity Markets

Introduction to Commodity Markets

Let’s learn more about Introduction to Commodity Markets. The Indian economy is witnessing a mini-revolution in commodity derivatives and risk management. Commodity options trading and cash settlement of commodity futures had been banned since 1952 and until 2002 commodity derivatives market was virtually non-existent, except for some negligible activity on an OTC basis. Now in September 2005, the country has 3 national-level electronic exchanges and 21 regional exchanges for trading commodity derivatives. As many as eighty (80) commodities have been allowed for derivatives trading. A commodity market involves buying, selling, or trading a raw product, such as oil, gold, or coffee. Also, there are hard commodities, which are generally natural resources, and soft commodities, which are livestock or agricultural goods. They are generic terms to describe the markets. It is similar to the way “stocks” and “equities” are used when investors talk about the stock market. It is a huge part of the Indian economy. It helps and contributes to the overall GDP growth.  

It includes the following:

• Commodity Exchanges in India
• Global Commodity Markets
• History of Commodity Derivatives in India
• Policy Initiatives
• Structure of the Indian Commodity Market
• Parties of a Commodity Exchange & Trading
• Latest Development
• Benefits of Commodity Markets

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