Indian commodity market and its derivatives

A commodity market is market in which every kind of movable good excluding money, securities and actionable claims, any good that possesses a physical attribute. A commodity is an economic good, trade-able good, product or article of commerce; something for which there is an founded, market where the commodity can be bought and sold in commercial transaction between willing buyers and sellers. Best commodity market tips gives you accurate commodity derivatives tips. Commodity market is wide range of precious metals, Agro product,energy product and other product like copper, lead, nickel etc. Commodity market is an important component of the financial markets of any country.

In India commodity derivatives required because some of reason It is common knowledge that prices of commodities,metal’s, shares and currencies fluctuate over time.The second reason is the possibility of adverse price changes in futures creates risk for business. Commodity derivatives can play the role in risk management. When Investors start to trade in commodity they search free MCX Tips Provider Indore because Commodity prices do vibrate more rapidly and provide profitable opportunities.

A commodity derivatives market is, in simple terms,nothing more or less than a public marketplace where commodities are contracted for purchase or sale at a set price for delivery at a specified date and given by Commodity Tips Provider Now we are talking about derivatives ; Contracts Futures or Options the value of which is derived from the underlying assets are called Derivatives. Derivatives are contracts that created from the need to minimize risk.

There are two kinds of important derivatives,first is a Commodity futures contract and second is a commodity option contract A futures contract is an agreement for buying or selling a commodity for a predefined delivery price at a specific future time. Futures are standardized contracts that are traded on, unified futures exchanges that ensure the performance of the contracts and thus remove the default risk. The commodity option holder has the right, but not the obligation,to buy(or sell) an exclusive quantity of a commodity at a as stipulated price on or before a specified date. The seller of the option writes the option in favor of the buyer (shareholder) who pays a certain premium to the seller as a price of the options. Futures and options trading therefore helps in defense the price risk and also provide investment opportunity to speculators who are willing to assume risk for a possible return.

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