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Being in the field of financial services for more than a decade and half, at SIHL
we believe in keeping the interest of our customers at the forefront. We believe
in giving integrated financial solutions to our clients and thus keeping this in
mind we have now introduced commodities trading services to our clients. Commodity
Trading is similar to Equity trading. In Equity Trading one can acquire shares and
in commodity trading one can acquire various commodities like, gold, silver, agricultural
products, Minerals, and Energy sector. Commodity markets are those markets where
raw or primary products are exchanged. These raw commodities are traded on regulated
commodities exchanges in which they are bought and sold in standardized Contracts.
This is called Commodity trading. Commodity Trading is increasingly becoming a prominent
business in India. To facilitate this trading there are three National level commodity
exchanges in India. |
- Multi commodity Exchange in India Ltd MCX (The Exchange is doing the highest volume
in gold in India.)
- National Commodity & Derivatives Exchange Ltd NCDEX (The
Exchange is doing good volume in agro commodity futures.)
- National Multi Commodity
Exchange of India Ltd - NMCE
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These exchanges are the hub of the trading of various commodities.
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Commodity derivatives provide unique money making opportunities to a wider section
of market participants, starting from investors, hedgers, arbitragers, and traders,
manufacturers, planters to exporters, importers etc. The commodity future trading
is not new to the agrarian Indian population nor are its advantages unknown |
- No balance sheet, P&L Statement, EBITDA and reading between the lines. Commodity
trading is about the simple economics of supply and demand.
- Supporters are known, only resistance matters! Minimum support price acts as statutory
support for many commodities.
- No Dollar-Rupee premiums/discounts. Indian commodity
derivates hedge both forex and commodity specific risks at a single cost.
- No
breaking of heads over market direction. Seasonality patterns quite often provide
clue to both short and long term players.
- No scam, no price rigging. Commodity
trading comes with nil insider trading and company specific risk.
- Compared to equities it is much cheaper to trade in commodities, where margin requirements
are lower.
- Trade in commodities through exchange incurs no cost of transportation
charges, insurance costs, storage charges or any security concerns.
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The following commodities are available in various categories on MCX
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- Bullion Gold & Silver
- Oil & Oil Seeds Castor Oil, Crude Palm Oil,
Soya, Mustard Oil
- Spices Cardamom, Jeera, Pepper, Red Chilli, Turmeric
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Metal Aluminium, Copper, Lead , Nickel, Iron, steel, Tin & Zinc
- Fiber Cotton,
Kapas, Jute
- Pulses - Chana, Masur, Yellow Peas
- Cereals - Maize
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Energy Crude Oil, Natural Gas
- Plantations Coffee, rubber
- Petrochemicals
PVC, HDPE
- Others Guar Seeds, Potato, Sugar
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- Future Contract: An agreement to purchase or sell a commodity for delivery
in the future
- Inflation: The rise in price of goods and services, or
Consumer Price Index (CPI), when too much money chases too few goods on the market.
Moderate inflation is a result of economic growth.
- Arbitrage: Simultaneous
purchase of cash commodities or future in one market against the sale of cash commodities
or futures in the same or a different market to profit from a discrepancy in prices.
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Hedge: Taking a position in a futures market opposite to a position held
in the cash market to minimize the risk of financial loss from an adverse price
change; a purchase or sale of futures as a temporary substitute for a cash transaction
that will occur later.
- Cross Hedge: Hedging a cash market position in
a futures contract for a different but price-related commodity.
- Forward Contracting:
A cash transaction common in many industries, in which a commercial buyer and seller
agree upon delivery of a specified quality and quantity of goods at a specified
future date.
- Spot Market: A market in which commodities such as grain,
gold or crude oil are bought and sold for cash and delivered immediately. Also called
cash market.
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To open an account we require following documents for opening a Trading Account.
Please submit a photocopy of the documents and bring original documents for verification.
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- Photo Proof (Any one of the following)
- Passport
- Voter Id
- Driving License
- Pan Card
- Address Proof (Any one of the following)
- Passport
- Voter Id
- Driving License
- Telephone Bill (Not more
than 2 months Old)
- Electricity Bill (Not more than 2 Months Old)
- Bank
Passbook
- Bank Statement (Not more than 2 months Old)
- Ration Card
- A copy of Cancelled Cheque
- Pan Card
- Signed Photograph of Holder
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Copy of notarized Power of Attorney, photograph of POA, Address proof of POA, PAN
card of POAand rubber stamp, if like to have POA for Account
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