Commodity Market Course Importance

India is an Agricultural country, still today 65% of people depend on agriculture. The main problem of Indian farmer is uncertainty in crop prices between sowing and harvesting time, to protect them above said price fluctuations and uncertainty in crop prices, commodity derivative market introduced in India today derivative contracts exist on variety of commodities such as corn, pepper, cotton, wheat, silver, gold etc.

To perform well in Commodity market operations NSE introduced COMMDITY DERIVATIVE DEALER MODULE in NCFM CERTICATION COURSES. Best for Stock Market Courses in Bangalore : MA NCFM Academy.

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In December 2003, The National Commodity and Derivatives Exchange Ltd (NCDEX) launched futures, NCDEX currently facilitates trading of ten commodities – gold, silver, soy bean, refined soy bean oil, rapeseed-mustard seed, expeller rapeseed-mustard seed oil, RBD palmolein, crude palm oil and cotton – medium and long staple varieties. At subsequent phases trading in more commodities would be facilitated.

NCDEX is promoted by a consortium of institutions. These include the ICICI Bank Limited (ICICI Bank), Life Insurance Corporation Limited (LIC), National Bank for Agriculture and Rural Development (NABARD) and National Stock Exchange of India Limited(NSE). NCDEX is the only commodity exchange in the country promoted by national level institutions.

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1. Introduction to Derivatives
=> Derivatives defined
=> Types of derivatives:
=> Financial derivatives
=> Commodity derivatives
=> Products, participants and functions
=> Exchange–traded versus OTC derivatives

2. Commodity Derivatives
=> How they differ from financial derivatives
=> Warehousing
=> Quality of underlying assets
=> Global commodities exchanges
=> Commodities exchanges in India (regional & national)
=> Commodities permitted for trading
=> Kabra Committee Report (Roadmap)
=> Commodity specific issues
=> Cropping and growth patterns
=> Global and domestic demand- supply dynamics
=> Price trends and factors that influence prices

3. Instruments available for trading
=> Types of instruments (future, options)
=> Basics
=> Payoffs

4. Pricing commodity derivatives
5. Using commodity derivative markets
=> Hedging
=> Speculation
=> Arbitrage

6. The NCDEX platform
=> About NCDEX
=> Exchange membership
=> Rules, regulations, byelaws

7. Commodities to be traded on the NCDEX platform.
=> Types of commodities
=> Bullion (silver & gold)
=> Agricultural commodities

8. Trading on the NCDEX platform
=> Contract specifications
=> Trading system
=> Entities in the trading system
=> Trader workstation
=> Order types and conditions
=> Exposure limits

9. Clearing, Settlement and Risk Management
=> Calendar and settlement schedule
=> Position determination
=> Settlement mechanism
=> Daily Mark to Market Settlement
=> Settlement price
=> Daily settlement price
=> Final settlement price
=> Margining
=> Initial margin
=> Daily Mark to Market margin
=> Open interest limits
=> Second Line of Defence
=> Final settlement
=> Cash settlement
=> Physical settlement(Warehousing)
=> Exception Handling
=> Funds Shortages
=> Delivery Shortages

10. Regulatory Framework
=> Rules governing Commodity Derivatives Exchanges
=> Rules governing Intermediaries
=> Investor Grievances, Arbitration Rules

11. Accounting and Taxation.

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