In India, trading in commodity derivatives has been in existence from the nineteenth century with organized trading in cotton through the establishment of Cotton Trade Association in 1875. Despite a long history of commodity markets, derivatives in Indian commodity markets seen far from the major countries as the introduction of derivatives on national platforms permitted in 2002. The commodities derivatives are regulated by the Securities and Exchange Board of India (SEBI). Commodity derivatives (Both Agriculture and Non Agriculture) available for Futures, Options and Index derivatives.
Benefits of Commodity Derivatives:
- Longest Trading Hours
- Hedging Opportunities
- Arbitrage Trading (Inter and Intra Commodities)
- Index and Option Trading
- Statistical and Chart Based Opportunities
- Strong Research and Advisory
- Online Trading and Payment Platform
- Online Real- Time back office
Commodities: Longest trading hours:
In India, commodities trading have longest trading hours as compare to peer asset classes. Commodities trading available from the Asian market trading hours to European trading hours and till US market trading hours. In short, traders can take benefits of macro data and international price volatile from morning to late night.
Commodities: Effective hedging tool:
Commodities hedging is the effective tool for the physical market participants as the volatility among the commodities increasing day by day. Hedging has long been a way for global commodity buyers and sellers to mitigate the risks of price fluctuations. The price risk management remains crucial for the company as it directly effects business margins of the company.
Commodities: Arbitrage opportunities:
Commodity advisory product designed with an objective of generate return through arbitrage in commodity segment. The arbitrage product minimize the risk as the objective is to take benefit of price differential between two markets and/or two contracts. The clients also can have a margin benefit as per the current norms of exchanges on risk assessment of arbitrage.