A Study on Commodities and Online Trading in Commodities

A Study on Commodities and Online Trading in Commodities

Abstract

This research focuses on comprehending the continuous development in the commodities market, which has seen significant change over the last decade. The commodities market changed dramatically after deregulation. The Indian futures commodities market has played a significant role in the Indian financial sector. The commodity market serves as a kind of leverage for hedging and speculating. If an investor is dissatisfied with the stock market, he or she may turn to the commodity market. The commodities market's degree of awareness has to be raised. 

Derivatives trading is presently allowed in six national and sixteen regional commodities exchanges in India. Derivatives are increasingly becoming a major instrument in the commodities market for price discovery, hedging, and speculating in order to facilitate efficient trading. This study examines the organisational structure, commodity exchange, and its impact on the commodities market.

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Introduction

India was granted the right to trade commodities futures in 2003. Commodity futures trading in India has grown dramatically for key agricultural commodities. As part of its anti-inflationary measures in 2007-08, the Indian government placed a temporary ban on certain commodities. The Indian commodities market has grown 50 times in five years, from INR 665 billion in 2002 to INR 33,753 billion in 2007, with a CAGR- Compounded Annual Growth Rate of 5%. The Forward Market Commission regulates the exchanges. The commodities market is divided into two types: forwards and futures alone. 

In the agricultural commodities market, options contracts are not enforced. The exchanges provide investors with an online trading mechanism. The transparency process of market players is provided through online platforms. The trade of agricultural commodities was then included into the existing market structure.

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Conclusion

According to this research, the Indian commodities market is seeing remarkable development. India's economy has historically been based on agriculture. Certain problems, such as commodity price volatility, have been a significant source of worry for both producers and consumers. More than 70% of India's population is dependent on agricultural goods. Commodity futures markets are an integral component of an agricultural liberalization agenda. There is a need for sector liberalization. Futures markets are one tool for attaining this level of openness.

For More Details About a Study on Commodities and Online Trading in Commodities Please Visit Our Website


Or call us +91 9481545735

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