A

PROJECT REPORT
ON
“TO STUDY SELECETED METAL COMMODITIES TRADED
AT MCX ”

FOR THE PARTIAL FULFILLMENT OF

BACHELOR OF BUSINESS ADMINSTRATION

SUBMITTED BY,
PILLAI AKHIL MURUGAN
T.Y.B.B.A.

SUBMITTED TO,

SAVITRIBAI PHULE PUNE UNIVERSITY.

UNDER THE GUIDANCE OF

MS. PRIYANKA PATIL
ACADEMIC YEAR
2018-2019
 C.H.M.E SOCIETY’S
BHONSALA MILITARY COLLEGE

RAMBHOOMI, NASHIK –5

CERTIFICATE
This is to certify that Ramdandee Pillai Akhil Murugan is a bonafide student of
third year B.B.A of this college for the year 2018 – 19. He has undertaken and
satisfactorily completed his project work in finance specialization as partial
fulfilment for requirement of the B.B.A course during A.Y 2018-19 as per the
rules of the university. He has completed his Project work on the topic
“To study selected metal commodities traded at MCX .”

University Seat No:

Place: Date:

(Head of Dept.) (Internal Examiner)(External Examiner)

 Company Certificate

This is to certify that Mr. Pillai Akhil Murugan student of Bhonsala Military
College, Nashik, pursuing B.B.A. has completed the projects work
satisfactorily. He has completed the project work on “To study selected metal
commodities traded at MCX ’’

Signature
 ACKNOWLEDGEMENT

I gladly take this opportunity to extend my sincerely gratitude to the

principal Dr. U. Y. KULKARNI (Bhonsala military College) and I would like
to give out sincere thanks to MR.NILESH PAWAR Head of BBA Department
for their constant encouragement and kind help during our work
I am greatly indebted to our internal guide MS. PRIYANKA PATIL for
her guidance & enlightening comments throughout the project work. It has been
an altogether different experience to work with him & I would like to thank him
for this helpful suggestion & numerous discussions.
I am thankful to all those who helped me directly or indirectly to develop this
project & complete it successfully. They had always been very prompt at
extending in their helping hand & sharing valuable knows. The smooth
completion of this project would not have been possible without their guidance.

Date: Sign:

Place: NASHIK Pillai Akhil Murugan

 DECLARATION

I, hereby declare that this project report entitled “To study selected metal
commodities traded at MCX ’’ is a genuine & bonafide work reported by me.
The empirical finding in this project report is based on the data
collected by myself. The matter presented in the report is not copied from any
other report.
This project is undertaken as a part of academic curriculum
according to the University rules norms & by no commercial interest &
Motives.

Date: Sign:
Place: NASHIK Pillai Akhil Murugan
 INDEX
CHAPTER PARTICUAR PAGE NO

1. INTRODUCTION

1.1 Introduction of the study

1.2 Object of the project

1.3 Objectives of the study

1.4 Scope of the study

1.5 Rational of the study

1.6 Limitation of the study

2. Research methodology

2.1 Research design

2.2 Primary and secondary data with it

sources

3. Profile of the organization

3.1 Introduction of the organization

3.2 Network/product of the organization

3.3 Organization structure flow chart

4. Analysis and Interpretation of data

5. Findings, Conclusion, Suggestions

6. Bibliography and annexure

CHAPTER-I

INTRODUCTION
1.1 Introduction of study

A project report is a document which provides detail on overall picture of the proposed
business. The project report gives an account of project proposal to ascertain the prospect of
the proposed plan.

Ever since the drawn of civilization, commodity trading has become an integral part of
trading. The first and foremost reason is that commodity represents the fundamental elements
of lifestyle of human beings. In the early days, people used to exchange goods for goods,
which was called as ‘Barter System’. With the advancement of civilization, trading system
has gone through various changes and has now entered into an era of future trading besides
existence physical trading across the world. The history of commodity future traced back to
1688 with the introduction of future trading in rice in Japan. This was followed by an
increased participation in commodity derivatives, especially in futures.

All the countries opened the avenue forintroduction of Future trading in commodities in 19th
century. Majorcommodity Future trading platforms opened in the world are ChicagoBoard of
Trade (NYBOT) and New York Mercantile Exchange (NYMEX).A Commodity derivative is
a contract which derives its value froman underlying commodity. The main purpose of Futur
e market is toprovide a mechanism for successfully managing the price riskassociated with co
mmodities. Future markets provide a platform forbuyers and sellers to trade in a huge number
of diverse commoditiessuch as agricultural products, metals and energy. These markets are n
otonly meant for hedgers, speculators and arbitrages, but also for retailinvestors who want to
trade in booming commodity market.

Commodities (commodity) are basic raw materials and foodstuffs such as metals, petroleum,
coffee, grain etc. Commodities are traded on a commodity exchange both by the companies
that use them (e.g. chocolate manufacturers) and by speculators. Futures contracts allow
commodity producers and commodity users to bring some predictability and stability to
pricing. By buying futures contracts, they can hedge against underlying price changes in
the commodity.

Commodity exchange are the exchanges where the trading of futures and forward stake
place, basically commodity exchange are trading in future contracts
onthose commodities which have some regional relevance it is not going to be aseasy as a sha
re of a company to get listed in a different exchange.

Commodity exchanges in India are expected to contribute significantly in the strengthening

Indian economy to face the challenges of globalization. The Commodity Exchange makes
commodity money available to all as a medium of exchange, store of wealth and unit of
account.
 Types of commodity market

1. MCX- Multi Commodity Exchange of India.

2. NCDEX- National Commodity and Derivative Exchange of India.

 Instruments in Commodity

1. MCX- Gold, Silver, Nickel, Zinc, etc

2. NCDEX- Jeera, Haldi, Grains, etc

 Types of contract

1. MCX- Futures contract, Options to be introduced soon.

2. NCDEX-Future contract

 Terminology

1. Bullions- gold and silver

2. Base metals- copper, nickel, lead, aluminum

 Energy

1. Crude oil

2. Natural gas

 Orders in commodity

1. Types of orders- limit, stoploss.

2. Products of orders- regular order, cover order.

1.2 Object of the study

As per mandatory requirement of Savitribai Phule Pune University, I have undertaken this
project as a part fulfilment of Bachelor of Business Administration curriculum.

Each management student learns a lot during his 3 years of BBA program, but the perfection
in his learning can’t be even imagined until & unless there is a practical training.

As a part of BBA curriculum after completion of 2nd year. We have to undergo the job
training for a period of two months after which we have to submit a project report to the
university by the completion of 6th semester.

Each management students learns a lot during his three years of BBA program. The
project provides required knowledge of the topics learned in classroom and to find its relation
with the real market scenario.

The project gives the live experience about the various aspects of the management
that is helpful from future point of view. The project provides the opportunity of
understanding the organization very closely.
1.3Objectives of the study

 To study the selected metal commodities traded at MCX.

 To study the Indian Commodity Market, Bombay Stock Exchange and National Stock
Exchange.

 To study and analyze the gold, silver, and platinum commodity in India.

 To understand comparative analysis of gold, silver, and platinum.

1.4 Scope of the study
 The scope of current project lies in commodity also the project covers the all aspect of
importance of financing and share awareness of the Motilal Oswal Pvt. Ltd.
 It gives us the idea of diversified investment portfolio.
 Gives the idea of gaining profitable returns.
 It helps in trading on lower margins.
1.5 Rational of the study
1. It is important to explain the rational of the research by providing valid arguments.
2. Firstly, the research needs to contribute to the elimination of a gap in the literature.
Elimination of gap in the present literature is one of the compulsory requirements for
your study. In other words, you don’t need to ‘re-invent the wheel’ in a way that your
research aims and objectives need to be totally new, or at least they have to offer fresh
perspectives on traditional management and business issues.
3. Education is only a mean to an end and not an end in itself.
4. The ultimate objective of making this project is to develop self-reliance, learning
habit, creating awareness of the special and culture environment developing
appropriate communication skills, application of knowledge of project and surveys of
these programs.
5. The project also helps to build the skills of analysis. The contribution of the project is
to accept as a great opportunity as one can apply the knowledge through project
surveys etc. and to study the problem faced by the organisation.
1.6 Limitations of study

 The research holds validity for the particular period only.

 The research is extended to particular commodities only.
 Spot prices vary from shop to shop.
 Study of awareness and perception of the investor is only based on sample size.
 CHAPTER-II
RESEARCH METHODOLOGY
2.1 RESEARCH DESIGN

The research design refers to the overall strategy that you choose to integrate the
different components of the study in a coherent and logical way thereby, ensuring you will
effectively address the research problem; it constitutes the blueprint for the collection,
measurement, and analysis of data
A research design is the "blue print" of the study. The design of a study defines the study type
(descriptive, co relational, semi-experimental, experimental etc.) and sub-type (descriptive -
longitudinal case study), research question, hypotheses, independent and dependent variables,
experimental design, and if applicable, data collection methods and a statistical analysis plan.
Research design is the framework that has been created answers to research questions.
The term research refer to search for facts. It is on extensive & careful investigation of a
given phenomenon with a specific goal of enhancing one’s knowledge level.

Research can also termed as a field of scientific & practical study where in order to
better administer. The business the company obtained data & analysis it research includes
finance data consumer feedback product research & competitive analysis.

 Types of research design:-

1] Qualitative research

2] Descriptive research

3] Exploratory research

4] Causative research
2.2 Primary and secondary data with its sources

 Primary Data –

Primary data is a first handed collected data. Primary data are obtained from the opinion
of the clients of commodity traders. I have collected this primary data here by taking the
opinion of the commodity trader.

Primary sources

1. Interview
2. Questionnaire
3. Observation
4. Schedules

Sources Used in Collection of Data ->

1.Interview

2.Observation

 Secondary data-

Secondary data is a data that has collected by and is quite reading obtainable from other
sources. It is the data which have been colleceted and completed earlier for some other
purpose by various sources.

Secondary sources

1. Journals
2. Magazines
3. Websites
4. Google

Sources used in collection of data->

1. Websites
2. Company Journals
3. Trade Magazines
CHAPTER-III
PROFILE OF THE

ORGANISATION
3.1 INTRODUCTION OF ORGANISATION

Motilal Oswal Group

Type : Financial services

Traded as BSE: 532892

NSE: MOTILALOFS

Industry : Finance

Founded : Mumbai, India, 1987

Headquarters : Motilal Oswal Tower, Prabhadevi, Mumbai

Key people : Motilal Oswal, Raamdeo Agrawal

Services : Wealth management, broking, equity

Parent : Motilal Oswal Financial Services Ltd

Subsidiaries : Motilal Oswal Securities Ltd,

Motilal Oswal Investment Services,

Motilal Oswal Investment Advisors Pvt Ltd,

Motilal Oswal Private Equity Advisors Pvt Ltd,

Motilal Oswal Asset Management Co. Ltd,

Aspire Home Finance Corporation Ltd.

Website : http://www.motilaloswalgroup.com
HISTORY OF MOTILAL OSWAL
MOTILAL OSWAL SECURITIES Ltd.

MOTILAL OSWAL SECURITIES Ltd. (MOSL) was founded in 1987 as a small

sub-broking unit, with just two people running the show. Focus on customer-first-attitude,
ethical and transparent business practice, respect for professionalism, research-based value
investing and implementation of cutting-edge technology has enabled us to blossom into an
almost 2000 member team.

Today firm offering a well diversified financial service and a range of financial
product and services such as Wealth Management, Broking & Distribution, Commodity
Broking, Portfolio Management etc.

The company was formed by MotilalOswal and RaamdeoAgrawal after they acquired
membership on The BSE. MotilalOswal was elected director and joined the Governing Board
of the Bombay Stock Exchange in 1998.
MotilalOswal Securities is a Depository Participant of NSDL and a Depository
Participant of Central Depository Services Limited (CDSIL) in 2000. The company started
offering Derivatives products and advisory services on both BSE as well as NSE in 2001.
In 2006 the company entered private equity and investment banking. In the same year,
MotilalOswal group acquired South Indian brokerage firm – Peninsular Capital Markets The
company tied up with State Bank of India and Punjab National Bank in 2006 and 2007 to
offer online trading to its customers.
2008 saw the company create one of India's largest Equity Dealing & Advisory
rooms, spread over 26,000 sqft (2,400 m2) in Malad, Mumbai.
In January 2010, MotilalOswal Financial Services (through its subsidiary
MotilalOswal Securities Ltd.) received the final certificate of registration approval
from Securities and Exchange Board of India (SEBI) to set up a mutual fund business in the
country.
MOAMC is a 100% subsidiary of Motilal Oswal Securities Limited. It provides
Investment Management and Advisory Services to investors based within and outside India
and having Portfolio Management Services business, ETFs and Mutual Funds. MotilalOswal
Asset Management Company Ltd., one of the fastest growing Asset Management Companies
in India and has recently crossed the $1 billion in equity Assets under Management (AUM)
mark in June 2015.

VISION:

 To enhance our customers the financial Security by creating wealth.

 To be one of the most trusted and globally reputed financial distribution companies.
 To Become No-1 In India Through Fair Practices & Keep Maintain This Position
Forever.
 Be a world class financial service provider, value based wealth creation to my clients
& become a well reputed organization
MISSION:

 To provide the customers the financial freedom by enhancing Wealth Management.

 Truly Value Based Wealth Creation Of Every Customer With Disciplined, Integrated
& Customize Services Way.
 Expand business both in the value, volume wise make it no 1 in its segment.

TEAM OF MOSL

Motilal Oswal Chairman & Managing Director Ramdeo Agarawal.

 Managing Joint Director- Navin Agarwal.

 Non - Executive Director- Praveen Tripathi.
 Independent Director -Vivek Paranjpe.
 Independent Director-Ms. Sharda Agarwal.
 Independent Women Director- Shalibhadra Shah.
 Chief Financial Officer- Kailash Purohit.
 On August 22, 1995 Mr. MotilalOswal and Mr. RamdeoAgrawal incorporated another
company, MotilalOswal Stock Brokers (I) Limited, for carrying on the broking and asset
management activities. The name MotilalOswal Brokers Limited was changed to
MotilalOswal Securities Limited, on February 12, 1996.

Pursuant to the order dated January 21, 1999 passed by the Hon'ble High Court of
Judicature at Bombay, sanctioning the scheme of amalgamation of VHPL with MotilalOswal
Securities Limited, the entire business and undertakings and all properties, interests and
assets of VHPL were transferred to MotilalOswal Securities Limited.

With a view to achieving better and more profitable utilization of the primary and
secondary markets and also the growth in mutual fund industry, MotilalOswal Securities
Limited was restructured. The retail and institutional stock broking division was hived off to
Deo Securities Private Limited along with its facilities of in-house equity research, pursuant
to the Scheme of Arrangement sanctioned by the Hon'ble High Court on October 19, 2000.

Thus, MotilalOswal Securities Limited continued to carry on the activities of

investments, while Deo Securities Private Limited carried on the activity of stock broking.
On November 30, 2000, MotilalOswal Securities Limited was renamed MotilalOswal
Investments Limited and subsequently changed to MotilalOswal Investments Private Limited
on December 12, 2002.

Deo Securities Private Limited was renamed as Deo Securities Limited on November
14, 2000 and was subsequently changed to MotilalOswal Securities Limited and received
fresh certificate of incorporation on November 30, 2000.

2001- MOSL registered with SEBI as a Dealer of OTC Exchange of India

2003-Commencement of portfolio management service by MOSL

2004 -Commencement of commodities broking business by MOCB

2005 -Incorporation of the Issuer to offer financial services and products -The Issuer
was incorporated under the Companies Act as "MotilalOswal Financial Services Limited"
vide Certificate of Incorporation No. 11- 153397 dated May 18, 2005 issued by the ROC and
received the certificate of commencement of business on June 3, 2005.

2006 -MOSL became a subsidiary of MOFSL upon acquisition of shares of MOSL

from the Promoters, Mr. MotilalOswal and Mr. Raamdeo Agrawal and some members of the
Promoter Group -MOCB became a subsidiary of MOFSL upon acquisition of shares from
Promoter, PIMPL -New Vernon Private Equity Limited and Bessemer Venture Partners Trust
subscribed to the equity shares and OCRPS of the Issuer –

MOSL acquired the customer rights and other assets of:

i. Peninsular Capital Markets Limited, (a broking entity based in Kerala);

ii. Mani Stock Brokers Limited, (a broking entity based in Uttar Pradesh); and
MOIA was incorporated to conduct investment and merchant banking -MOVC was
incorporated to conduct venture fund management and advisory services -MOVC and MOIA
became the subsidiaries of the Issuer upon acquisition of shares from Promoter, Mr.
MotilalOswal and Mr. RaamdeoAgrawal -MotilalOswal Investments Private Limited was
renamed as Passionate Investment Management Private Limited (PIMPL), and received a
fresh certificate of incorporation on February 23, 2006.

2008– The Company has splits its face value from Rs5/- to Rs1/-. -MotilalOswal`s India
Business Excellence Fund raised USD 125 million, 25% higher than the initial target of USD
100 million

2009 -The 14th MotilalOswal Wealth Creation Study presentation held in Mumbai in
December 2009 and was covered live on CNBC TV18 -MotilalOswal Financial Services
purchased its new corporate office building based in Prabhadevi, the heart of Mumbai city
with a planned usable area of over 2,00,000sqft -MotilalOswal 5th Annual Global Investor
Conference was held in Mumbai where around 80 Indian Corporates participated and over
400 investors from all over the world attended

2010 -The 15th MotilalOswal Wealth Creation Study presentation was held in Mumbai on
15th December 2010 and was covered live on CNBC TV18 -MotilalOswal 6th Annual
Global Investor conference was held in Mumbai from August, 2010. Around 110 corporates
participated in the conference and more than 500 investors attended it. MotilalOswal in
association with Zee Business hosted the first of its series of seminars under its investor’s
education initiative called Investor Ki KahaniUsi Ki Zubanion July 2,2011at BSE in
Mumbai. The seminar saw a colossal turnout with more than 750 investors attending the
session.
MAJOR ACHIEVEMENTS OF MOTILAL OSWAL

 MOFSL has been featured in Forbes Super 50 Companies 2017.

 MotilalOswal Securities received two awards for its equity research in IT and
commodity (forex) segments at India's Best Market Analyst Awards 2014, India's
biggest Financial Market Awards also called as ZEE Business Awards 2014.
 MotilalOswal Financial Services Ltd's Analyst Mr. Jinesh Gandhi won the Best
Market Analyst Award for the categories Equity-Auto at ‘India`s Best Market Analyst
Awards 2013 organized by Zee Business.
 MotilalOswal Securities was awarded with Best Performing National Financial
Advisor Equity Broker Award in 2012, second time in succession.
 CNBC TV18 awarded MotilalOswal the Best Performing Equity Broker Award in
2010 at CNBC TV18 Financial Advisor Awards 2010.
 MotilalOswal IB team won the Asia Pacific Cross Border Deal of the year award in
2010 and the CEO Ashutosh Maheshvari got India M&A Investment Banker of the
Year award.
 MotilalOswal Securities Ltd. rated as No.1 Broker in ET Now – Starmine Analyst
Awards 2009.
 3.2PRODUCT OF THE ORGANISATION

Equities

Long Term Wealth Creation

Equities give you the dual advantage of protecting your wealth from inflation along with
enhancing your purchasing power. The key to successful equity investments lies in investing
with a long-term perspective and keeping away from day-to-day uncertainties.
Historical Data proves that equity as an asset class has performed better than any other asset
class over the years.

MOSL Edge
 Trade & invest in Cash & Margin products, ETF’s and Stock SIP’s across BSE, NSE &
MSEI
 Multiple Trading & Tracking Investment Options: Desktop, Mobile,Website,Smartwatch,Call
& Trade Desk and Dedicated Advisors
 All platforms integrated with LIVE market feeds, advanced tools and MOSL research &
advice
 Customized investment strategies & actionable advice across time horizons & risk profiles
 Expert Portfolio Restructuring for Equity holdings
 29 plus years of wealth creation experience
 Best Performing Equity Broker (National) at the CNBC TV18 Financial Advisor Awards, 4
years in a row.
 Derivatives

Take The Benefits Of Equity One Step Further.

Derivatives are an excellent avenue for people who don’t wish to invest large amounts of
capital upfront. They are an effective tool to hedge your risks, speculate and earn returns in a
relatively shorter duration.

MOSL Edge
 Option to trade in Futures and Options across NSE and BSE
 Future Plus, an excellent leverage product for intraday traders with limited margin
 Multiple Trading & Tracking Investment Options: Desktop,Mobile,Website,Smartwatch,Call
& Trade Desk and Dedicated Advisors
 Dedicated technical research desk providing daily & monthly reports
 Customized actionable strategies as per risk profiles and time horizons
 Exclusive in-house tools designed for faster decision making & single click execution
 Flexible brokerage plans to suit your trading needs.
 Commodities

Diversify Your Portfolio For Minimizing Risks

Commodity trading opens up diverse avenues for investments, away from the traditional
avenues of equity, bonds and real estate. Adding commodities exposure to your existing
portfolio helps you increase your returns while lowering the risk.

MOSL Edge
 Option to trade across Bullion, Base Metals, Energy, Agro etc.
 Customized offerings for Investors, Traders, Hedgers, Speculators or Arbitrageurs
 Availability of structured products, inter-commodity spreads etc.
 Value Plus, an excellent leverage product for intraday traders with limited margin
 Alternative investments like E-Gold, E-Silver with DEMAT options
 Multiple Trading & Tracking Investment Options: Desktop,Mobile,Website,Smartwatch,Call
& Trade Desk and Dedicated Advisors
 Specialized Research desk providing customized strategies, insightful reports and market
updates.
 Currencies

World’s Largest Market - Driven By Fundamentals

Currencies are recognized as world’s largest market, accessible globally 24 hours a day. The
advantage of small margin requirements and low entry barriers makes them an important part
of a retail investor’s portfolio. What’s more, you can trade in currencies through your
existing equity account.

MOSL Edge
 Trade in Futures, Options and Inter-currencies across NSE-CD, MCXSX-CD & BSE-CD
 Option to utilize your margins and collaterals across Equity, F&O, Currency segments
 Multiple trading options: Desktop, Web, Mobile, Call & Trade and Dedicated Advisors(1)
 Specialized Research desk providing customized strategies, insightful reports and market
updates.
 Mutual Funds

Convenient Way Into The Stock Markets.

Mutual funds are ideal for investors who do not have the sufficient time and expertise to pick
winning stocks. Additionally, they also give you the advantage of professional management,
lower transaction costs, diversification, liquidity and tax benefits.

MOSL Edge
 9,000+ schemes available across 37 AMC’s
 Investment options across Equity, Debt, Balanced, Tax Saving funds
 Lump sum, SIP, STP and SWP facility to help you manage your investments wisely
 Multiple Trading & Tracking Investment Options: Desktop, Mobile,Website,Smartwatch,Call
& Trade Desk and Dedicated Advisors
 Dedicated relationship managers to provide timely recommendations
 Online tracking tools with in-built portfolio restructuring recommendations
 Model portfolios based on risk profile with benchmark comparisons, research views etc.
 PMS

Premium Investment Vehicle With Range Of Investment Options.

Portfolio Management Service offers professional management of your investments with an
aim to deliver consistent returns. It relieves you from all monitoring hassles with benefits like
regular reviews, strong risk management flexibility and makes it an ideal investment avenue
for high net worth investors.

MOSL Edge
 India’s leading PMS service providers, with approx Rs. 1,300 Cr. of Assets Under
Management
 More than 4,300 active accounts and client base spanning across 138 different cities
 Various themes like large cap, small & mid cap, flexi cap etc. to suit varied investment needs
 Value PMS, our flagship product has consistently outperformed its benchmark over 10 years
and is quarterly rated by Morningstar, an internationally reputed agency.
 IPOs

Participate Early In Growth Stories

The primary market provides investor’s opportunities to buy shares at a reasonable price prior
to its listing price. Additionally retail investors also enjoy discounted rates while applying for
IPO’s. Holding on to the shares also provide an opportunity to participate in the future
success of these companies.

MOSL Edge
 Advantage of either applying for IPOs through online platforms as well as offline
 IPO recommendations for select offers provided by our advisory team
 Secure investing through a single login across devices Desktop, Mobile or Web.
 Insurance

Risk & Financial Protection

Insurance is all about risk and financial protection for you and your family. It is an essential
tool to save you from potential losses faced from unexpected instances.

MOSL Edge
 Wide range of Life & General insurance products
 Comprehensive coverage recommendations based on specific needs
 Tie-ups with multiple Life & General insurance companies
 Online Tracking feature to help you get all your financial investments under one roof.
 Fixed Income

Regular Income For Low Risk Appetite Investors.

Debt products are low risk and reasonably safe and consistent investment options. It’s a
preferred option for investors seeking fixed regular income with liquidity.

MOSL Edge
 Wide range of products from Company Fixed Deposits, Bonds, NCDs etc.
 Flexibility to choose your investment amount, tenure, interest payment and maturity periods
 Dedicated Research and Advisory desk for customized recommendations
 Online Tracking feature to help you get all your financial investments under one roof
 Regular updates via email on new products and recommendations.
3.3 ORGANIZATION STRUCTURE FLOW CHART`
 CHAPTER- IV
ANALYSIS AND
INTERPRETATION OF DATA
4.1 What is commodity market?

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. This article focuses on the history and current debates
regardingglobal commodity markets. It covers physical product (food, metals and electricity)
markets but not the ways that services, including those of governments, nor
investment,nor debt, can be seen as a commodity. Articles on reinsurance markets, stock mar
kets, bond markets and currency markets cover those concerns separately and in more depth.
One focus of this article is the relationship between simple commodity money and the more
complex instruments offered in the commodity markets.

4.1.1 History
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 beans 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 overestimate. 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.

4.1.2 Early history of commodity markets

Historically, dating from ancient Sumerian use of sheep or goats, other people susing pigs,
rare seashells, or other items as commodity money, people have sought ways to standardize
and trade contracts in the delivery of such items, to render trade itself more smooth and
predictable. 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. 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 became very
powerful empires, trusted by many peoples to manage and mediate trade and commerce.
4.2 India and the Commodity Market.
4.2.1 When did Commodity Market start in India?

Organized commodity derivatives in India started as early as 1875, barely about a decade
after they started in Chicago. However, many feared that derivatives fuel unnecessary
speculation and were detrimental to the healthy functioning of the markets for the underlying
commodities. As a result, after independence, commodity options trading and cash settlement
of commodity futures were banned in 1952. A further blow came in 1960s when, following
several years of severe draughts that forced many farmers to default on forward contracts
(and even caused some suicides), forward trading was banned in many commodities
considered primary or essential. Consequently, the commodities derivative markets
dismantled and remained dormant for about four decades until the new millennium when the
Government, in a complete change in policy, started actively encouraging the commodity
derivatives market. Since 2002, the commodities futures market in India has experienced an
unprecedented boom in terms of the number of modern exchanges, number of commodities
allowed for derivatives trading as well as the value of futures trading in commodities, which
might cross the $ 1 Trillion mark in2006. However, there are several impediments to be
overcome and issues to be decided for sustainable development of the market.
4.2.2 History of Commodity Market in India

The history of organized commodity derivatives in India goes back to the nineteenth century
when cotton trade association started futures trading in 1875, about a decade after they started
in Chicago. The act envisages three tire regulations :
1. Exchange which organizes forward trading in commodities can regulate trading on
day-to-day basis.
2. Forward Markets Commission provides regulatory oversight under the powers
delegated to it by the central Government.
3. The Central Government- Department of Consumer Affairs, Ministry of Consumer
Affairs, Food and Public Distribution- is the ultimate regulatory authority.
4.2.3 Present Commodity Market In India.
Today commodity exchanges are purely speculative in nature. Before discovering the price,
they reach to the producers, end-users, and even there investors, at a grassroots level. It
brings price transparency and risk management in the vital market. By exchange rules and by
law, no one can bid under a higher bid, and no one can offer to sell higher than someone.
This keeps the market as efficient as possible and keeps the traders on their toes to make sure
no one gets the purchase or sale before they do. Since 2002, the commodities future market
India has experienced an unexpected boom in terms of modern exchanges, number of
commodities allowed for derivatives trading as well as the value of futures trading in
commodities, which crossed $1 trillion mark in 2006. In India there are 25 recognized future
exchanges. The four exchanges are:
1. National Commodity & Derivatives Exchange Limited, Mumbai.
2. Multi Commodity Exchange of India Limited, Mumbai.
3. National Multi- Commodity Exchange of India Limited, Ahmadabad.
4. Indian Commodity Exchange Limited, Gurgaon.

 Indian Commodity Market Structure.

 Commodities Traded in India.

4.3 Derivatives
Another major leap in the development of commodities markets is the growth in commodity
derivative segment. Derivatives trading have a long history. The first recorded incident of
commodities trade was traced back to the times of ancient Greece. The dawn of the 21st
century brought back the good times for commodity markets. With the end of 20 year bear
market for commodities, following the global economic recovery and increased demand from
China and other developing nations, has revitalized the charisma of commodities market.
According to the forecasts given by experts commodities markets are likely to experience
bright future with the depreciation in the value of financial assets. Furthermore increasing
global consumption, declining U.S Dollar value, rising factor-input costs and the recent
recovery of the market from the clutches of bear trend are considered to be the positive
symptoms, which contribute to the acceleration of growth in commodity markets segment.

4.3.1Meaning of Derivatives

A derivative is a product whose value is derived from the value of one or more underlying
variables or assets in a contractual manner. The underlying assets can be forex, equity,
commodity or any other asset. In other words derivative means having no independent value
i.e the value is derived from the value of underlying assets. Derivatives means a forward,
future, option or any other hybrid contract. Thus, a derivative contract is an enforceable
agreement whose value is derived from the value of an underlying asset. The four most
common examples of derivative instruments are forwards, futures, options, and spreads.
It is a financial instrument which derives its value/price from the underlying assets.
Originally, underlying corpus is first created which can consist of one security or a
combination of different securities. The value of the underlying asset is bound to change as
the value of the underlying assets keep changing continuously.
Generally stocks, bonds, currency, commodities and interest rates form the underlying asset.
4.3.2 Using Commodity Future

1. Hedging

Many participants in the commodity futures market are hedgers. They use the futures market
to reduce a particular risk that they face. This risk might relate to the price of wheat or oil or
any other commodity that the person deals in. The classic hedging example is that of wheat
farmer who wants to hedge the risk of fluctuations in the price of wheat around the time that
his crop is ready for harvesting. By selling his crop forward, he obtains a hedge by locking in
to a predetermined price. Hedging does not necessarily improve the financial outcome;
indeed, it could make the outcome worse. What it does however is, that it makes the outcome
more certain. Hedgers could be government institutions, private corporations like financial
institutions, trading companies and even other participants in the value chain, for instance
farmers, extractors, ginners, processors etc., who are influenced by the commodity prices.

2. Speculation

An entity having an opinion on the price movements of a given commodity can speculate
using the commodity market. While the basics of speculation apply to any market,
speculating in commodities is not as simple as speculating on stocks in the financial market.
For a speculator who thinks the shares of a given company will rise, it is easy to buy the
shares and hold them for whatever duration he wants to. However, commodities are bulky
products and come with all the costs and procedures of handling these products. The
commodities futures markets provide speculators with an easy mechanism to speculate on the
price of underlying commodities. To trade commodity futures on the NCDEX, a customer
must open a futures trading account with a commodity derivatives broker. Buying futures
simply involves putting in the margin money. This enables futures traders to take a position
in the underlying commodity without having to actually hold that commodity.

3. Arbitrage
A central idea in modern economics is the law of one price. This states that in a competitive
market, if two assets are equivalent from the point of view of risk and return, they should sell
at the same price. If the price of the same asset is different in two markets, there will be
operators who will buy in the market where the asset sells cheap and sell in the market where
it is costly. This activity termed as arbitrage involves the simultaneous purchase and sale of
the same or essentially similar security in two different markets for advantageously different
prices. The buying cheap and selling expensive continues till prices in the two markets reach
equilibrium. Hence, arbitrage helps to equalize prices and restore market efficiency.
4.3.3 How The Commodity Market Works (Working Procedure)

The futures market is a centralized market place for buyers and sellers from around the world
who meet and enter into commodity futures contracts. Pricing mostly is based on an open cry
system, or bids and offers that can be matched electronically. The commodity contract will
state the price that will be paid and the date of delivery. Almost all futures contracts
end without the actual physical delivery of the commodity. There are two kinds of trades in
commodities. The first is the spot trade, in which one pays cash and carries away the goods.
The second is futures trade. The underpinning for futures is the warehouse receipt. A person
deposits certain amount of say, good X in a ware house and gets a warehouse receipt which
allows him to ask for physical delivery of the good from the warehouse but someone trading
in commodity futures need not necessarily posses such a receipt to strike a deal. A person can
buy or sale a commodity future on an exchange based on his expectation of where the price
will go. Futures have something called an expiry date, by when the buyer or seller either
closes (square off) his account or give/take delivery of the commodity. The broker maintains
an account of all dealing parties in which the daily profit or loss due to changes in the futures
price is recorded.

Following diagram shows the working of the Commodity Market:

4.4 GOLD

For centuries, gold has meant wealth, prestige, and power, and its rarity and natural beauty
have made it precious to men and women alike. Owning gold has long been a safeguard
against disaster. Many times when paper money has failed, men have turned to gold as the
one true source of monetary wealth. Today is no different. While there have been fluctuations
in every market and decided downturns in some, the expectation are that gold will hold its
own. There is a limited amount of gold in the world, so investing in gold is still a good way
to plan for the future. Gold is homogeneous, indestructible and fungible. These attributes set
gold apart from other commodities and financial assets and tend to make its returns
insensitive to business cycle fluctuations. Gold is still bought(and sold) by different people
for a wide variety of reasons - as a use in jewellery, for industrial applications, as an
investment and so on.

Country-wise share in Gold Production, 2017 and 2018

Country Tonnes,2017 Tonnes,2018

South Africa 139.9 140

Australia 295.1 270

Canada 175.8 170

USA 230.0 209

China 426 455

Indonesia 154.3 100

Russia 270.7 250

4.4.1Production

Traditionally South Africa has been the largest producers of gold in the world accounting for
almost 80% of all non-communist output in 1970. Although it retained its position as the
single largest gold producing country, its share had fallen to around 17%by 1999 because of
high costs of mining and reduced resources. Table 4.1 gives the country-wise share in gold
production. In contrast other countries like US, Australia, Canada and China have increased
their output exponentially with output from developing countries like Peru and other Latin
American countries also increasing impressively. Mining and production of gold in India is
negligible, now placed around 2 tonnes(mainly from the Kolar gold mines in Karnataka) as
against a total world production of about 2,272 tonnes in 1995.

4.4.2Global and Domestic Demand-Supply Dynamics

The demand for gold may be categorized under two heads - consumption demand and
investment demand. Consumption of gold differs according to type, namely industrial
applications and jewellery. The special feature of gold used in industrial and dental
applications is that some of it cannot be salvaged and thus is truly consumed. This is unlike
consumption in the form of jewellery, which remains as stock and can reappear at future time
in market in another form. Consumer demand accounts for almost 90% of total gold demand
and the demand for jewelry forms 89% of consumer demand In markets with poorly
developed financial systems, inaccessible or insecure banks, or where trust in the government
is low, gold is attractive as a store of value. If gold is held primarily as an investment asset, it
does not need to be held in physical form. The investor could hold gold-linked paper assets or
could lend out the physical gold on the market attaining a higher return in addition to savings
on the storage costs. Japan has the highest investment demand for gold followed closely by
India. These two countries together account for over 50% of total world demand of gold for
retail investment. Investment demand can be split broadly into two, private and public sector
holdings. There are several ways in which investors can invest in gold either directly or
through ha variety of investment products, each of which lends it to specific investor
preferences:
 Coins and small bars
 Gold accounts: allocated and unallocated
 Gold certificates and pool accounts
 Gold Accumulation Plan
 Gold backed bonds and structured notes
 Gold futures and options
 Gold-oriented funds
4.4.3Demand

The Consumer demand for gold is more than 3400 tonnes per year making it whopping $40
billion worth. More than 80% of the gold consumed is in the form of jewellery, which is
generally pre-dominated by women. The Indian demand to the tune of 800 tonnes per year is
making it the largest market for gold followed by USA, Middle East and China. About 80%
of the Physical gold is consumed in the form of jewellery while bars and coins occupy not
higher than 10% of the gold consumed. If we include jewellery ownership, then India is the
largest repository of gold in terms of total gold within the national boundaries. Regarding
pattern of demand, there are no authentic estimates, the available evidence shows that about
80% is for jewellery fabrication for domestic demand, and15% is for investor-demand (which
is relatively elastic to gold-prices, real estate prices financial markets, tax-policies, etc.).
Barely 5% is for industrial uses. The demand for gold jewellery is rooted in societal
preference for a variety of reasons - religious, ritualistic, a preferred form of wealth for
women, and as a hedge against inflation. It will be difficult to prioritize them but it may be
reasonable to conclude that it is a combined effect, and to treat any major part as exclusively
a store of value or hedging instrument would be unrealistic. It would not be realistic to
assume that it is only the affluent that creates demand for gold.

4.4.4Supply
Indian gold holding, which are predominantly private, is estimated to be in the range of
10000-13000 tonnes. One fourth of world gold production is consumed in India and more
than 60% of Indian consumption is met through imports. The domestic production of the gold
is very limited which is around 9 tonnes in 2002 resulting in more dependence on imported
gold. The availability of recycled gold is price sensitive and as such the dominance of the
gold supply through import is in existence. The fabricated old gold scraps is price elastic and
was estimated to be near 450 tonnes in 2002. It rose almost more than 40% compared to the
previous year because of rise in gold price by more than 15%

The demand-supply for gold in India can be summed up thus:

1. Demand for gold has an autonomous character. Supply follows demand.

2. Demand exhibits income elasticity, particularly in the rural and semi-urban areas.
3. Price differential creates import demand, particularly illegal import prior to the
commencement of liberalization in 1990.
4.4.5 Price trends and factors that influence prices
Indian gold prices follow more or less the international price trends. However, the strong
domestic demand for gold and the restrictive policy stance are reflected in the higher price of
gold in the domestic market compared to that in the international market at the available
exchange rate. Since the demand for gold is closely tied to the production of jewelry, gold
prices tend to increase during the time of year when demand for jewellery is greatest.
Christmas, Mothers Day and Valentine Day are all major shopping seasons and hence the
demand for metals tends to be strong a few months ahead of these holidays. Also, the
summer wedding season sees a large increase in the demand for metals, so price strength in
March and April is not uncommon. On the other hand in November, December, January and
February prices tend to decline and jewelers tend to have holiday inventory to unwind.

4.4.6 History of derivative markets in Gold

Gold futures trading debuted at the Winnipeg Commodity Exchange (Comex) in Canada in
November 1972. Delivery was also available in gold certificates issued b yBank of Nova
Scotia and the Canadian Imperial Bank of Commerce. The gold contracts became so popular
that by 1974 there was as many as 10,00,000 contracts floating in the market. The futures
trading in gold started in other countries too. This included the following

 The London gold futures exchange started operations in the early 1980s.
 The Sydney futures exchange in Australia began functioning with a contract in1978.
This exchange had a relationship with the Comex where participants could take open
positions in one exchange and liquidate them in the other.
 The Singapore International Monetary Exchange (Simex) was set up in 1983 byway
of an alliance between the Gold Exchange of Singapore and the International
Monetary Market (TMM) of Chicago.
 The Tokyo Commodity Exchange (Tocom), which launched a contract in 1982, was
one of the few commodity exchanges to successfully launch gold futures. Trading
volume on the Tocom peaked with seven million contracts.
 On December 31, 1974, the Commodity Exchange, the Chicago Board of Trade, the
Chicago Mercantile Exchange and the Mid-America Commodity Exchange
introduced gold futures contracts.
 The Chinese exchange, Shanghai Gold Exchange was officially opened on 30October
2002
 Mumbai's first multi-commodity exchange, the National Commodities and
Derivatives Exchange, NCDEX launched in 2003 by a consortium of ICICI
Bank Limited, Life Insurance Corporation, National Bank for Agriculture and Rural
Development and National Stock Exchange of India Limited, introduces gold futures
contracts.

Gold has a very active derivative market compared with other commodities. Gold accounts
for 45 per cent of the worlds commercial banks commodity derivatives portfolio.
4.4.7 Analysis of Prices of Gold in India in Last 5 Years.

YEAR GOLD RATE(10GRAMS)

2015 26,343

2016 28,623

2017 29,667

2018 30,830

2019 34,625

GOLD RATE(10 GRAMS)

YEAR
2015
2016
2017
2018
2019
4.5 SILVER

The dictionary describes it as a white metallic element, sonorous, ductile, very malleable and
capable of high degree of polish. It also has the highest thermal and electrical conductivity of
any substance. Silver is somewhat harder than gold and is second only to gold in malleability
and ductility. Silver remains one of the most prominent candidates in the metals complex as
far as futures' trading is concerned. Thanks to its unique volatility, silver has remained a hot
favorite speculative vehicle for the small time traders. Though futures trading were banned in
India since late sixties, parallel futures markets are still very active in Delhi and Indore.
Speculative interest in the white metal is so intense that it is believed that combined volume
of Indian punters represent almost 40 percent of volume traded at New York Commodity
Exchange. Delhi, Rajasthan, MP and UP are the active pockets for the silver futures. Until
recently, Rajkot and Mathura were conducting futures but now players have diverted
toward comex trade.

Most of the world's silver is mined in the US, Australia, Mexico, Peru, and Canada.Cash
markets remain highly unorganized in the silver and impurity and excessive speculation
remain key issue for the trade. Taking cue from gold, government of India is planning to
introduce hallmarking in silver which is likely to address quality and credibility of Indian
silverware and jeweler industry. The unique properties of silver restrict its substitution
in most applications.
4.5.1 Production
Silver ore is most often found in combination with other elements, and silver has been mined
and treasured longer than any of the other precious metals. Mexico is the world’s leading
producer of silver, followed by Peru, Canada, the United States, and Australia. The main
consumer countries for silver are the United States, which is the world’s largest consumer of
silver, followed by Canada, Mexico, the United Kingdom, France, Germany, Italy, Japan and
India. The main factors affecting these countries demand for silver are macro economic
factors such as GDP growth, industrial production, income levels, and a whole host of other
financial macro-economic indicators.

4.5.2 Demand
Demand for silver is built on three main pillars; industrial and decorative uses photography
and jewelry & silverware. Together, these three categories represent more than 95 percent of
annual silver consumption. With the growing use of silver in photography and electronics,
industrial demand for silver accounts for roughly 85% of the total demand for silver. Jewelry
and silverware is the second largest component, with more demand from the flatware
industry than from the jewelry industry in recent years. India, the largest consumer of silver,
is gearing up to start hallmarking of the white precious metal by April. India annually
consumes around 4,000 tonnes of silver, with the rural areas accounting for the bulk of the
sales. India's demand for silver increased by177 per cent over the past 10 years as compared
to 517 tonnes in 1991.

4.5.3 Supply

The supply of silver is based on two facts, mine production and recycled silver scraps. Mine
production is surprisingly the largest component of silver supply. It normally accounts for a
little less than 2/3 rd of the total (last year was slightly higher at68%). Fifteen countries
produce roughly 94 percent of the world’s silver from mines. The most notable producers are
Mexico, Peru, the United States, Canada and Australia. Mexico, the largest producer of
silver from mines. Peru is the world’s second largest producer of silver. Silver is often mined
as a byproduct of other base metal operations, which accounts for roughly four-fifths of the
mined silver supply produced annually. Known reserves, or actual mine capacity, is evenly
split along the lines of production. The mine production is not the sole source - others being
scrap, disinvestments, government sales and producers hedging. Scrap is the silver that
returns to the market when recovered from existing manufactured goods or waste. Old scrap
normally makes up around a fifth of supply. Scrap supply increased marginally last year up
by 1.2%. The other major source of silver is from refining, or scraps recycling. Because silver
is used in the photography industry, as well as by the chemical industry, the silver used in
solvent sand the like can be removed from the waste and recycled. The United States recycles
the most silver in the world, accounting for roughly 43.6 million ounces. Japan is the second
largest producer of silver from scrap and recycling, accounting for roughly 27.8 million troy
ounces in 1997. In the United States and Japan, three-quarters of all the recycled silver comes
from the photographic scrap, mainly in the form of spent fixer solutions and old X-ray films.
4.5.4 Factors Influencing Prices of Silver

The prices of silver, like that of other commodities, are dictated by forces of demand and
supply and consumption. Besides, a host of social, economic and political factors have
powerful bearing on silver prices. As in the case of gold prices, political tensions, the threat
affects the price of silver too. When trading and movement of silver is restricted, within or
outside national boundaries, prices move in accordance with demand and supply conditions
prevalent in mat environment Price of silver is also influenced by changes in factors such as
inflation (real or perceived), changing values of paper currencies, and fluctuations in deficits
and interest rates, etc. Although prices and incomes are important factors, they are also
influenced by factors such as tastes, technological change and market liberalization.

Approximately 70 percent of the silver mined in the western hemisphere is mined as a

byproduct of other metal products, such as gold, copper, nickel, lead, and zinc. As such, the
price of these metals greatly affects the supply of silver mined in any year. As die price of die
omer metal products increases, die increased profit margin to mine operations stimulate
greater production of die omer metals, and as a result, die production of silver increases in
tandem. Because silver is a precious metal, its price is determined by die supply and demand
ratio at any given moment. As is the case with other precious metals, there is a limited
amount of silver in the world. It is not a product mat can be manufactured en masse, and,
mere fore is subject to issues such as weamer and politics mat may affect silver mining
operations.
4.5.5 Historical Background of Silver Market
Major markets like the London market (London Bullion Market Association), which started
trading in the 17th century provide a vehicle for trade in silver on a spot basis, or on a
forward basis. The London market has a fix which offers the chance to buy or sell silver at
a single price. The fix begins at 12:15 p.m. and is a balancing exercise; the price is fixed at
the point at which all the members of the fixing can balance their own, plus clients, buying
and selling orders.

Trading in silver futures resumed at the Comex in New York in 1963, after a gap of 30years.
The London Metal Exchange and the Chicago Board of Trade introduced futures trading in
silver in 1968 and 1969, respectively. In the United States, the silver futures market functions
under the surveillance of an official body, the Commodity Futures Trading Commission
(CFTC). Although London remains the true center of the physical silver trade for most of the
world, the most significant paper contracts trading market for silver in the United States is the
COMEX division of the New York Mercantile Exchange. Spot prices for silver are
determined by levels prevailing at the COMEX. Although there is no American equivalent to
the London fix, Handy & Harman, a precious metals company, publishes a price for 99.9%
pure silver at noon each working day.
4.5.6 Analysis of Prices of Silver in India in Last 5 Years.

YEAR SILVER RATES(KG)

2015 37,825

2016 36,990

2017 38,090

2018 40,980

2019 43,742

SILVER RATES(KG)

2015
2016
2017
2018
2019
 CHAPTER-V
FINDINGS, SUGGESTIONS AND
CONCLUSIONS
5.1 Findings

 Commodity market is still in the nascent stage in India as it is emerging stage

 In India MCX is trading in buillion market.

 They fix the prices on daily trading bases.

 There is positive correlation between both market traders, they can easily predict the
future prices of the commodities and hedge their positions

 Now commodity future market is not new to the investors as almost 82% of
respondents are aware about commodity future market out of them only 16% have
actually invested.

 The player creates the bull and bear situation in the commodity market based on
money power and profit booking motives.

 The commodity is currently only concerned with the future contracts of 1 month and
3 month maturity and this should further be expanded.

 The business in the commodity market is very risky.

 These markets are also very useful to jewelry traders. They trade on both sides i.e. on
their shop and in MCX markets to settle down their profits or loss.

 The role of hedgers is done by farmers. Farmers settle down their profits by doing
trading in MCX markets.

 Farmers and general people are not that much aware about the commodity market.
But due to general awareness they have started gaining profits from these markets.
5.2 Suggestions

 Both spot gold and future gold markets are positively correlated, the traders have
knowledge about the commodity demand and supply and their price fluctuations. So,
MOSL can approach these traders and they can easily convince them, so these people
are the targeted people for MOSL.

 More awareness program has to be conducted by MOSL consultants so that already

aware investors take the challenge to invest in this commodity future market.

 The best opportunities for investors to protect themselves against the coming financial
reckoning are with precious metals and mining stocks.
5.3 Conclusions
India is one of the top producers of a large number of commodities and also has a long
history of trading in commodity and related derivatives. The market has made enormous
progress in terms of technology, transparency and trading activity. Interestingly this have
happen only after the govt protection was removed from the number of commodity and
market forces were allowed to play their role. This should act as a major lesson for the policy
makers in developing countries that pricing and price risk management should be left to the
market forces rather than try to achieve these through administered price mechanisms. The
management of price risk is going to assume even greater importance in future with the
promotion of free trade. In short I want to say that, today the commodity market is not only
limited to the particular country but it also spread across the world.

 India is the second largest market in the world after the China.

 In commodity market, there is no delivery based market activity. Only the contracts
are taking place.

 Large traders (e.g. MNC’s) maintain large stock of the quantity and play speculation
in the market.

 The “Holding Capacity” of participating traders is very strong.

 General people and framers are not that much aware about the commodity market, so
the speculators and the gamblers are taking the advantage of commodity market.
CHAPTER-VI
BIBLIOGRAPHY
6.1 WEBSITE
www.google.com
www.sebiindia.com
www.motilaloswalgroup.com
www.mcx.com

6.2 SOURCE PERSON

Sourabh Jadhav