A Study on Performance of Commodities Derivatives Trading in India

Ever since the first light of development commodities trading has become an integral part in the lives of mankind. Derivatives are a best financial instrument which helps investors to mitigate risk. The term commodity refers to a physical substance such as food, grains and metals which is interchangeable with another product of the same type, and which investors buy or sell, usually through future contracts. The price of the commodity is subject to supply and demand. Over the years commodities markets have been confronting tremendous progress, which is obvious from the fact that the trade in this section is existing as the boon for the global economy today. The commodity trading has been regulated by commodity exchanges and forward market commission .The major objective of this study is to figure out the trading practices and level of performance with special reference to one of the major commodity exchange in India, that is Multi Commodity Exchange (MCX). The challenging nature of these markets has made them an attractive investment avenue for investor's economy. Indian commodity derivatives market has been rationalized in 2003 and futures contracts trading has seen upturn in terms of volume and value surge with very swift growth during that decade. It raised itself to compete in the global market with international giants, such as NYMEX, CBOT, LME, etc., and became the top fifth exchange in terms of number of contracts in gold, second in silver, copper and natural gas. It is found that the trading in commodity derivatives is about three times more than in physical market, whereas, it is more than ten times in advanced economies. Dr. S. P. Dhandayuthapani | Hari Sudha"A Study on Performance of Commodities Derivatives Trading in India" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-2 | Issue-4 , June 2018, URL: http://www.ijtsrd.com/papers/ijtsrd10926.pdf http://www.ijtsrd.com/management/accounting-and-finance/10926/a-study-on-performance-of-commodities-derivatives-trading-in-india/dr-s-p-dhandayuthapani