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Submitted by
             Tejal Navarangani
               Parth Shah

               Submitted to
               Maulik Vasani

The Sunshine Group of Institution, Rajkot
   The behaviour of commodity prices, an issue that has received
    considerable attention from academics, is also a major concern
    for producers and consumers.

   Most commodity markets are distinguished by the fact that
    there is a spot or cash market in which the physical product is
    sold as well as a forward market in which contracts for future
    delivery of the product are sold.

   Our research is based on the problem that weather future
    treading effect on spot market or not.
   1. Commodity Spot Prices:
  An Exploratory Assessment of Market–Structureand Forward–Trading Effects1
By Margaret E. Slade & Henry Thille, September 2004


    in this as with most empirical studies of futures prices, we find
    a p ositive time–series relationship between trading volume
    and the volatility of spot prices. Moreover,since we deal with
    multiple related markets, we are able to assess that
    relationship in the cross section, and we find that it is also
    positive. Our findings are consistent with the predictions of
    many destabilizing–speculation and informational models. We
    can, however, go further. Indeed, we are able to exploit our
    instrumental–variables technique to distinguish between
    broad classes of theories that predict a positive relationship.
2. Commodity Derivative Market and its Impact on
  Spot Market
By Golaka C Nath and Thulasamma Lingareddy

      It is expected that futures trading helps in reducing
 seasonal/cyclical fluctuation in price. We wanted to find out
 if this has happened in case of the above commodities. the
 study finds that the introduction of future trading in the
 selected commodities had apparently led to increase in price
 of commodity like urad but the same is not true for wheat
 and gram. The spot prices of all three commodities under
 study have increased in the post futures period though
 except for urad, variables are not found statistically
 significant. The spot prices of these commodities declined
 after the ban on futures trading was introduced.
 However, the price volatility increased significantly during
 the period when futures were allowed. There has been a
 sharp fall in volatility after the ban of futures in these
 commodities. Althou gh gram prices too have posted a
 moderate rise in the post-futures trading period, the
 impact was not found statistically significant.
   whether the index futures trading in India has caused
    a significant change in spot market volatility of the
    selected underlying individual commodity.

    how the index futures trading has affected trading
    efficiency of the selected commodity.

   Find out the perception of investors.

   Find out the investing pattern of investor in
    commodity market.

   How commodites are treaded in commodity market.
   Ho : commodity prices effects on spot prices.
   H1: commodity prices does not effect on spot prices.
1.   Research design
      THIS RESEARCH FALL INTO CATEGORY OF Exploratory
     research


2. Data Collection Design

     ◦ PRIMARY DATA
       The data regarding commodity prices and spot prices will
       be procured from respective news papers and exchange
       websites etc.

     ◦ SECONDARY DATA
       Through Questionnaire investors’ preference can be known.
3.Sampling Design

 ◦ Sampling design would be conveniences.

 ◦ Sample size would be of 7 commodities.

 ◦ Population will be of all commodities.
   Prepare proposal by        15th December 2010

   Complete fieldwork by      28th February 2011

   Data collection by         5th March

   Complete analysis by       15th March 2011

   Complete final report by   25th March 2011
   First investors’ awareness towards this concept can be known.
    Some of the investors who are not aware about this, they can
    be guided on this area. Again traders and broking firms can be
    aware about relevance between future market and spot market.

    Beneficiaries
    Customers
    Broking firms
    Investors
    Traders
    Other prospective customers
The presentation on the effect of commodity futures

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The presentation on the effect of commodity futures

  • 1. Submitted by Tejal Navarangani Parth Shah Submitted to Maulik Vasani The Sunshine Group of Institution, Rajkot
  • 2. The behaviour of commodity prices, an issue that has received considerable attention from academics, is also a major concern for producers and consumers.  Most commodity markets are distinguished by the fact that there is a spot or cash market in which the physical product is sold as well as a forward market in which contracts for future delivery of the product are sold.  Our research is based on the problem that weather future treading effect on spot market or not.
  • 3. 1. Commodity Spot Prices: An Exploratory Assessment of Market–Structureand Forward–Trading Effects1 By Margaret E. Slade & Henry Thille, September 2004 in this as with most empirical studies of futures prices, we find a p ositive time–series relationship between trading volume and the volatility of spot prices. Moreover,since we deal with multiple related markets, we are able to assess that relationship in the cross section, and we find that it is also positive. Our findings are consistent with the predictions of many destabilizing–speculation and informational models. We can, however, go further. Indeed, we are able to exploit our instrumental–variables technique to distinguish between broad classes of theories that predict a positive relationship.
  • 4. 2. Commodity Derivative Market and its Impact on Spot Market By Golaka C Nath and Thulasamma Lingareddy It is expected that futures trading helps in reducing seasonal/cyclical fluctuation in price. We wanted to find out if this has happened in case of the above commodities. the study finds that the introduction of future trading in the selected commodities had apparently led to increase in price of commodity like urad but the same is not true for wheat and gram. The spot prices of all three commodities under study have increased in the post futures period though except for urad, variables are not found statistically significant. The spot prices of these commodities declined after the ban on futures trading was introduced. However, the price volatility increased significantly during the period when futures were allowed. There has been a sharp fall in volatility after the ban of futures in these commodities. Althou gh gram prices too have posted a moderate rise in the post-futures trading period, the impact was not found statistically significant.
  • 5. whether the index futures trading in India has caused a significant change in spot market volatility of the selected underlying individual commodity.  how the index futures trading has affected trading efficiency of the selected commodity.  Find out the perception of investors.  Find out the investing pattern of investor in commodity market.  How commodites are treaded in commodity market.
  • 6. Ho : commodity prices effects on spot prices.  H1: commodity prices does not effect on spot prices.
  • 7. 1. Research design THIS RESEARCH FALL INTO CATEGORY OF Exploratory research 2. Data Collection Design ◦ PRIMARY DATA The data regarding commodity prices and spot prices will be procured from respective news papers and exchange websites etc. ◦ SECONDARY DATA Through Questionnaire investors’ preference can be known.
  • 8. 3.Sampling Design ◦ Sampling design would be conveniences. ◦ Sample size would be of 7 commodities. ◦ Population will be of all commodities.
  • 9. Prepare proposal by 15th December 2010  Complete fieldwork by 28th February 2011  Data collection by 5th March  Complete analysis by 15th March 2011  Complete final report by 25th March 2011
  • 10. First investors’ awareness towards this concept can be known. Some of the investors who are not aware about this, they can be guided on this area. Again traders and broking firms can be aware about relevance between future market and spot market. Beneficiaries Customers Broking firms Investors Traders Other prospective customers