2. WHY FUTURE ONLINE TRADING COMMODITY
BUSINESS ?
Online Mobility Business – Computer/Laptop/Mobile App
Low cost setup (No need for Bank Loan just need only 10% Margin
Money)
No Transportation, Degradation, Labor, Security Charges
No Need – License, Market, Location, Customer, Shop/Office,
Advertising
Hedging/Arbitrage, Profit with both direction. i.e. Long/Short, Up/Down
Auto updated Back Office – Ledger (No Paper Work and Accountant)
Advise by Experts on TV CNBC AWAZ, Zee Business, SMS/Mail by
Exchange
Portfolio diversification and risk management
Low Margins – High Leverage
18. OTHER INFORMATION
Exchange Timings
Agri Products : 10.00 AM TO 5.00 PM
Other commodities : 10.00 AM TO 11.30 PM
Instrument Traded : Futures Contract
Expiry of Contracts : Different for different
commodities
Margin of Contracts : Different for different
commodities
19. WHAT ARE COMMODITY
FUTURES ?
A tool used by Investors, Hedgers,
Arbitragers, Day Traders
A Financial Contract
The underlying commodity is bought or
sold at a future date
20. PURPOSE OF FUTURE MARKET
Those who wish to discover information about future price of
commodities (SUPPLIERS)
Those who wish to Speculate (SPECULATORS)
Those who wish to transfer risk to some other party (HEDGERS)
Those who want to take advantage of price difference in difference
markets (ARBITRAGERS)
22. BENEFITS…
INVESTOR
Portfolio diversification and risk management
Additional investment opportunity
PHYSICAL TRADER
Low cost business
No transportation, storage, insurance, security charges
Domain knowledge of industry
TRADERS
Low margins – High leverage
No balance sheet, P&L, EBTDA
HEDGERS
23. HEDGING
PURPOSE
o Avoid risk of adverse market movement
RATIONAL
o Cash and futures prices trend to move in tandem
o Converge by close to expiry
TYPES OF HEDGE
o Long Hedge
o Short Hedge
ADVANTAGES
o Lock in a prices and margin in advance
24. TYPES OF
HEDGING
LONG HEDGE
Hedges that involve taking a long position in futures
contract
Appropriate when a company plans to owns certain
asset in the futures
SHORT HEDGE
Hedges that involve taking a short position in futures
contract
Appropriate when the hedger already owns the asset or
likely to own the asset and expects to sell it in future
25. SHORT HEDGE -
EXAMPLE
SOYABEAN PRODUCER STOCKS
Expecting/ Having stock 100 Qtl (1 lot) of Soyabean
Case
If price goes up by Rs. 100 Gain Rs. 10000/-
If price goes down by Rs.
100
Loss Rs. 10000/-
SUPPOSE
SOYABEAN producer wants to sell SOYABEAN in
futures
There is an equal chances of price going up or down
There is a risk if price goes down
26. SHORT HEDGE- EX. CONTD…
If your view is Bearish on Market
DATE SPOT FUTURES
1st Jan Rs. 3200/Qtl Rs. 3600/Qtl
1st Jan Buy/Hold Sell
With Hedge (You rule out a loss)
1ST Feb SPOT FUTURES NET
PROFIT
Case 1-
Rs. 3100/Qtl
Loss -
Rs. 100/Qtl
Profit –
Rs. 500/Qtl
Profit –
Rs. 400/Qtl
Case 2 –
Rs. 3700/Qtl
Profit –
Rs. 500/Qtl
Loss –
Rs. 100/Qtl
Profit –
Rs. 400/Qtl
WITHOUT HEDGE
Case 1-
Rs.
3100/Qtl
Loss-
Rs. 100/Qtl
-------------- Loss –
Rs. 100/Qtl
Case 2 –
Rs. 3700/Qtl
Profit –
Rs. 500/Qtl
-------------- Profit –
Rs. 500/Qtl
In Future Market with just 10 % Margin Money here just with Rs.
36000/- per Lot you can make Profit upto Rs. 40000/- with hedging.
27. LONG HEDGE – EXAMPLE
If your view is Bullish on
Market
CHANA CONSUMER STOCK
Wants to Buy Chana in Future 100 Qtl (1 Lot) of Chana
Case
If price goes Up by Rs. 100 Loss – Rs. 10000/-
If price goes Down by Rs.
100
Gain – Rs. 10000/-
Scenario of consumer who wishes to lock input
prices
There is an equal chances of price going up or down
There is a Risk if price goes up
28. LONG HEDGE – EX.
CONTD…DATE SPOT FUTURE
1ST Jan Rs. 2800/Qtl Rs. 3000/Qtl
1st Jan Hold/Consume Buy
With Hedge (you rule out a loss)
Spot Future Net Result
Case 1-
Rs. 2700/Qtl
Loss –
Rs. 100/Qtl
Loss –
Rs. 300/Qtl
Loss –
Rs. 400/Qtl
Case 2 –
Rs. 3600/Qtl
Profit –
Rs. 800/Qtl
Profit –
Rs. 600/Qtl
Profit-
Rs.1400/Qtl
Without Hedge
Case 1 –
Rs. 2700/Qtl
Profit –
Rs. 100/Qtl
-------------- Profit –
RS.100/Qtl
Case 2 –
Rs. 3600/Qtl
Loss –
Rs. 800/Qtl
-------------- Loss –
Rs. 800/Qtl
29. EXCHANGE VS BILATERAL TRADING
EXCHANGE BILATERAL TRADING
Common platform for all traders Restricted access
Price transparency Traded prices unknown to other players
Low transaction costs High cost and time consuming
negotiations
Absence of counter party credit risk Counter party credit risk
Market prices available to wider world Difficulty in price dissemination
30. RISKS ENCOUNTERED BY INDUSTRY
Price volatility depends on international market
movement
Results in higher procurement cost reducing operational
margins
No options or tools were available earlier
Directionless market
No control measures
Counter party risk
Credit risk especially during periods of volatile prices
Quantity risk during shortages
Quality risk
31. ONLINE TRADING
Single Screen customized market watch for
MCX/NCDEX with BSE/NSE
Streaming quotes & intra day trading calls
Mobile Trader App
PRO-ACTIVE RELATIONSHIP
MANAGEMENT
Relationship Management Desk
Educating Client on Commodities Future Markets
24*7 Services
32. ADVANTAGES WITH US
• Top Quality Research :
Edelweiss Comtrade Ltd.
Continue support – Renisha Chainnani
(CNBC AWAZ, Zee Business)
Professionally qualified analysts with rich industry
experience.
Research on Precious metal, Base metal, Energy &
Agri Products.
Daily outlook report and trading calls on SMS.
33. Advantages of Client
Round the clock operations in commodities
trading
Indian commodities market, unlike stock market is open till 11.30 in the night
and MoneyPlant Financial Services all poised to offer to round the
clock services through its dedicated team of professionals.
Better trading facility
State of Infrastructure
The strong IT backbone of our back office system, nation-wide connectivity
and website
