Commodities Derivatives
₹120.00
SYBFM — SEMESTER – IV
Author: Evelyn Correia
Description
SYLLABUS
| No. | Modules / Units |
| 1 | Introduction of Derivatives: |
| ¨ Derivatives definition, Types of derivatives, Products, Participants and Functions, Exchange traded v/s OTC Derivatives – How Commodity Derivatives differ from financial Derivatives – Warehousing, Quantity of underlying assets, Global Commodity Exchanges, Commodity Exchanges in India, Commodities permitted for trading, Kabra committee Report, Commodity specific issues – Cropping and Growth patterns, Global Domestic demand – supply dynamics, Price trends and Factors that influence prices. | |
| 2 | Pricing Commodity Derivatives: |
| ¨ Investment assets v/s Consumption assets – The Cost of Carry Model – Pricing futures contracts on investment commodities-Pricing futures contracts on consumption commodities-The futures basics- Concept of Hedging, Speculation, Arbitrage. | |
| 3 | Trading: Basic Concepts |
| ¨ Basic concepts such as Margins, Circuit filters – delivery norms – Contracts specifications, Trading system, and Entities in the trading system, Trader workstation, Order types and conditions, Exposure limits, Commodities to be traded: Types of commodities: Bullion (silver and Gold), Agricultural commodities.
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 Defense, NSCCL span. Final Settlement: Cash settlement, Physical settlement (warehousing). Exception handling: Funds shortages, Delivery shortages. |
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| 4 | Regulatory Framework: |
| ¨ Rules governing Commodity derivatives-Derivatives Exchange, Rules Governing Intermediaries, Investor Grievances, Arbitration Rules. |
