Commodities and financial futures ppt

Exchanges are non-profit or for-profit organizations that offer standardized futures contracts for physical commodities, foreign currency and financial products. Commodity derivatives are increasingly used for financial speculation. Having reached a certain threshold in futures trading, financial markets play a more 

A commodity futures contract is an agreement to buy or sell a predetermined amount of a commodity at a specific price on a specific date in the future. Commodity futures can be used to hedge or protect an investment position or to bet on the directional move of the underlying asset. The Economic Role of Financial Futures William L. Silber Background Before 1972, futures trading was dominated by agricultural commod­ ities. The introduction of foreign currency futures in 1972, interest rate contracts in 1975, and stock index futures in 1982 has shifted the industry from the almost exclusive province of agricultural inter­ There are two types of derivatives. Commodity derivatives and financial derivatives. Firstly derivatives originated as a tool for managing risk in commodities markets. In commodity derivatives, the underlying asset is a commodity. It can be agricultural commodity like wheat, soybeans, rapeseed, cotton etc. or precious metals like gold, commodity market both in India and at a global level. Since this research is focused on the inter relationship of the spot and futures market, a decription of the features of the commodity market in India is given in this chapter. Broadly, the discussion on the market structure, role Commodity trading dates back to agrarian societies. Trading agricultural commodities got underway in an organised way in the US when the Chicago Board of Trade (CBOT) was established in 1848. Farmers traded commodity futures with speculators on the CBOT to lock in harvest prices in advance. It continued to expand over the following century,

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TYPES OF FUTURES CONTRACTFutures contracts can be broadly classified into 2 categories Commodities futures Financial futures 3. Commodity futures Metals Major metals traded with futures contracts include copper, gold, platinum, palladium and silver, which are listed on the New York Mercantile Exchange which has merged with the Chicago Mercantile Exchange. Energy The most popular energy futures contracts are crude oil, crude palm oil, heating oil and natural gas. Forwards and Futures on Commodities have special features Forwards and Futures traded in the market Physical forward delivers physical every day for a month, like an average of the spot price NYMEX futures, settles on physical forwards NYMEX Lookalike forwards, settles on NYMEX future price at expiry CBOT T-bond futures, for example, have a tick of 1/32nd of one percent. Since a single contract represents a $100,000 face value bond, the tick size equals $31.25. Traders frequently talk in terms of ticks to express profits or losses on a trade. For example, the value of a tick in CBOT muni bond futures is $31.25. OTC and Exchange Traded Derivatives. 1. OTCOver-the-counter (OTC) or off-exchange trading is to trade financial instruments such as stocks, bonds, commodities orderivatives directly between two parties without going throughan exchange or other intermediary.• The contract between the two parties are privately negotiated.• CHAPTER II COMMODITIES MARKET: AN OVERVIEW 2.1 INTRODUCTION role played by the growing presence of financial investors in commodity markets. central government, the regulation and development of the commodities futures markets were defined. In December 1952, the Forward Contracts (Regulation) Act was enacted by Fundamental analysis is a means of examining commodities in an attempt to predict the future path of least resistance for prices. The basis for fundamental analysis is supply and demand. When looking at prices of a commodity, the concept of supply and demand amounts to a simple equation.

Basics of Futures Trading and Trading Platforms to Choose From - Futures trading is a form of investment which involves speculating on the price of a commodity going up or down in the future. This presentation explains the basics of futures trading and some of the challenges a new trader may face.

CBOT T-bond futures, for example, have a tick of 1/32nd of one percent. Since a single contract represents a $100,000 face value bond, the tick size equals $31.25. Traders frequently talk in terms of ticks to express profits or losses on a trade. For example, the value of a tick in CBOT muni bond futures is $31.25. OTC and Exchange Traded Derivatives. 1. OTCOver-the-counter (OTC) or off-exchange trading is to trade financial instruments such as stocks, bonds, commodities orderivatives directly between two parties without going throughan exchange or other intermediary.• The contract between the two parties are privately negotiated.• CHAPTER II COMMODITIES MARKET: AN OVERVIEW 2.1 INTRODUCTION role played by the growing presence of financial investors in commodity markets. central government, the regulation and development of the commodities futures markets were defined. In December 1952, the Forward Contracts (Regulation) Act was enacted by Fundamental analysis is a means of examining commodities in an attempt to predict the future path of least resistance for prices. The basis for fundamental analysis is supply and demand. When looking at prices of a commodity, the concept of supply and demand amounts to a simple equation. Futures prices are delayed 10 minutes, per exchange rules, and are listed in CST. Time Frames. Choose from one of two time-frames from the drop-down list found in the data table's toolbar: Intraday - Intraday prices by commodity will always show prices from the latest session of the market. The 's' after the last price indicates the price has settled for the day. A commodity futures contract is an agreement to buy or sell a predetermined amount of a commodity at a specific price on a specific date in the future. Commodity futures can be used to hedge or protect an investment position or to bet on the directional move of the underlying asset. The Economic Role of Financial Futures William L. Silber Background Before 1972, futures trading was dominated by agricultural commod­ ities. The introduction of foreign currency futures in 1972, interest rate contracts in 1975, and stock index futures in 1982 has shifted the industry from the almost exclusive province of agricultural inter­

Exchanges are non-profit or for-profit organizations that offer standardized futures contracts for physical commodities, foreign currency and financial products.

commodity market both in India and at a global level. Since this research is focused on the inter relationship of the spot and futures market, a decription of the features of the commodity market in India is given in this chapter. Broadly, the discussion on the market structure, role Commodity trading dates back to agrarian societies. Trading agricultural commodities got underway in an organised way in the US when the Chicago Board of Trade (CBOT) was established in 1848. Farmers traded commodity futures with speculators on the CBOT to lock in harvest prices in advance. It continued to expand over the following century, A commodity futures contract is an agreement to buy or sell a particular commodity at a future date. The price and the amount of the commodity are fixed at the time of the agreement. Most contracts contemplate that the agreement will be fulfilled by actual delivery of the commodity. The assets often traded in futures contracts include commodities, stocks, and bonds. Grain, precious metals, electricity, oil, beef, orange juice, and natural gas are traditional examples of commodities, but foreign currencies, emissions credits , bandwidth, and certain financial instruments are also part of today's commodity markets. Hedgers have a position in the underlying commodity. They use futures to reduce or limit the risk associated with an adverse price change. Producers, such as farmers, often sell futures on the crops they raise to hedge against a drop in commodity prices. This makes it easier for producers to do long-term planning. Commodities Browse news and quotes for dozens of commodity futures, or select a commodity for charting and rate data. Select a commodity Brent Crude Oil Ethanol Heating Oil Natural Gas RBOB Gasoline WTI Crude Oil Copper COMEX Gold Palladium Platinum Silver 5000oz Iron ore Cattle Cocoa Coffee (Robusta) Coffee (Arabica) Corn Cotton Feeder Cattle Lean Hogs Lumber Orange Juice Soybeans Soybean Meal Sugar #11 Wheat White Sugar Further, the futures are divided into two broad categories, which are: Commodity Futures: The contract whose subject matter is commodities such as aluminum, gold, coffee, sugar etc. Financial futures: The contract which deals with financial instruments like treasury bill, currency and so on.

A futures contract is a binding agreement between a seller and a buyer to make ( seller) and to take (buyer) delivery of the underlying commodity (or financial 

A commodity futures contract is an agreement to buy or sell a predetermined amount of a commodity at a specific price on a specific date in the future. Commodity futures can be used to hedge or protect an investment position or to bet on the directional move of the underlying asset. The Economic Role of Financial Futures William L. Silber Background Before 1972, futures trading was dominated by agricultural commod­ ities. The introduction of foreign currency futures in 1972, interest rate contracts in 1975, and stock index futures in 1982 has shifted the industry from the almost exclusive province of agricultural inter­ There are two types of derivatives. Commodity derivatives and financial derivatives. Firstly derivatives originated as a tool for managing risk in commodities markets. In commodity derivatives, the underlying asset is a commodity. It can be agricultural commodity like wheat, soybeans, rapeseed, cotton etc. or precious metals like gold, commodity market both in India and at a global level. Since this research is focused on the inter relationship of the spot and futures market, a decription of the features of the commodity market in India is given in this chapter. Broadly, the discussion on the market structure, role Commodity trading dates back to agrarian societies. Trading agricultural commodities got underway in an organised way in the US when the Chicago Board of Trade (CBOT) was established in 1848. Farmers traded commodity futures with speculators on the CBOT to lock in harvest prices in advance. It continued to expand over the following century, A commodity futures contract is an agreement to buy or sell a particular commodity at a future date. The price and the amount of the commodity are fixed at the time of the agreement. Most contracts contemplate that the agreement will be fulfilled by actual delivery of the commodity. The assets often traded in futures contracts include commodities, stocks, and bonds. Grain, precious metals, electricity, oil, beef, orange juice, and natural gas are traditional examples of commodities, but foreign currencies, emissions credits , bandwidth, and certain financial instruments are also part of today's commodity markets.

5 Jul 2010 Chapter 16 Commodities and Financial Futures. 10,247 views. Share; Like; Download Commodities and Financial Futures Learning Goals Describe the essential features of a futures contract and explain how the futures market operates. Explain  Exchanges are non-profit or for-profit organizations that offer standardized futures contracts for physical commodities, foreign currency and financial products. Commodity derivatives are increasingly used for financial speculation. Having reached a certain threshold in futures trading, financial markets play a more  A futures contract is a binding agreement between a seller and a buyer to make ( seller) and to take (buyer) delivery of the underlying commodity (or financial  Commodities are things you can buy or sell -- physical goods such as oil, grain or metals. Futures are contracts to buy and sell things in the future. They come