The document provides an overview of commodities trading, including: - Commodities include agricultural and non-agricultural goods that are traded on exchanges. Key exchanges discussed are MCX and NCDEX in India. - Derivatives like futures contracts allow traders to take positions in commodities and profit from price movements. Margin requirements and delivery processes are outlined. - Various order types, brokerage charges, and trading timelines are reviewed for the Indian commodity exchanges. Physical delivery and demat processes are also summarized. - Additional resources like exchange websites are recommended for more information on participating, margins, contract specs, and trading commodities.

1. Basics of
Commodities
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2. Commodities as an asset class is
integral to completion of the
Investment Puzzle
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3. Product Participants Risk
• Commodity • Speculators • Limit
future • Hedgers • Cover
• Factors effecting • Arbitragers • Our responsibility
commodity prices
• Charges
• Delivery process
The Commodities market
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4. What is a Commodity?
 Commodity includes all kinds of goods
 “Every kind of movable property other than actionable
claims, money and securities"
Agro Non agro
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5. Derivatives
Derivatives are financial contracts, which derive their value
from an underlying asset. The underlying "asset can be
equity, commodity, foreign exchange, interest rates, real
estate or any other asset.
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6. Commodity Market Types
Spot
Buyer Seller
Forward
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7. Futures Contract
Legally binding agreement to buy or sell an underlying asset
sometime in future
Quantity – Lot size fixed
Delivery time - Expiry date is fixed
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8. Futures Position
 BUY Futures : Right as well as obligation to buy
underlying commodity at the future date
 SELL Futures : Right as well as obligation to sell
underlying commodity at the future date
Right – To claim profit, if any
Obligation – To pay loss, if any
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9. International Exchanges
Chicago Board of Trade (CBOT) New York Mercantile Exchange (NYMEX)
London Metal Exchange (LME) Tokyo Commodity Exchange (TOCOM)
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10. Domestic Exchange
 Cotton 1893 (Bombay Cotton Exchange)
 Oilseeds 1900 (Gujarati Vyapari Mandali)
 Wheat 1913 (Chamber of Commerce – Hapur)
 Bullion 1920 in Mumbai
 Jute 1927 (Calcutta Hessian Exchange ltd)
 After 1940s, futures trading faced rough weather as
governments wanted to curb inflation.
 Resurgence after 2003
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11. Structure of Indian Commodity Market
Ministry of
Consumer Affairs &
Public Distribution
Forward Markets
Commission
(FMC)
Other regional
NCDEX MCX NMCE
exchanges
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12. Leading Commodity Exchanges
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13. Commodities Traded on Exchanges
Commodities Market
Precious Metals Base Metals Energy Agriculture
- Gold - Copper - Crude Oil - oil seeds
- Silver - Zinc - Natural Gas - Spices
- Platinum - Nickel - ATF - Cereals
- lead - Others
- Aluminum
- Tin
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14. Lot Size and Margin - MCX
CONTRACT MARGIN
MCX SYMBOL %MARGIN Price Quotation Lot LOT SIZE PRICE SIZE RS.
ALUMINIUM 5.00 1 KG 5 MT 5000 109.65 548,250 27,413
CARDAMOM 10.25 1 KG 500 KG 500 1581.1 790,550 81,031
COPPER 5.00 1 KG 1 MT 1000 429.6 429,600 21,480
CRUDE OIL 5.00 1 BARREL 100 BARREL 100 4144 414,400 20,720
GOLD 4.00 10 GM 1 KG 100 20511 2,051,100 82,044
GOLDGUINEA 4.00 8 GM 8 GM 1 16289 16,289 652
GOLDM 4.00 10 GM 100 GM 10 20514 205,140 8,206
LEAD 5.00 1 KG 5 MT 5000 110.55 552,750 27,638
LEAD MINI 5.00 1 KG 1 MT 1000 110.55 110,550 5,528
MENTHAOIL 8.00 1 KG 360 KG 560 1134.4 635,264 50,821
NATURALGAS 6.25 1 MMBTU 1250 MMBTU 1250 186.2 232,750 14,547
NICKEL 6.00 1 KG 250 KG 250 1076.5 269,125 16,148
POTATO 5.00 100 KG 30 MT 300 668.9 200,670 10,034
SILVER 5.00 1 KG 30 KG 30 44370 1,331,100 66,555
SILVERM 5.00 1 KG 5 KG 5 44361 221,805 11,090
ZINC 5.50 1 KG 5 MT 5000 103.75 518,750 28,531
ZINCM 5.50 1 KG 1 MT 1000 103.7 103,700 5,704
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15. Lot Size and Margin - MCX
CONTRACT MARGIN
NCDEX SYMBOL %MARGIN Price Quotation Lot LOT SIZE PRICE SIZE RS.
CHARJDDEL 5.00 100 KG 10 MT 100 2542 254,200 12,710
CHLL334GTR 10.00 100 KG 5 MT 50 8034 401,700 40,170
GARGUMJDR 9.00 100 KG 5 MT 50 6430 321,500 28,935
GARSEDJDR 8.00 100 KG 10 MT 100 2463 246,300 19,704
GURCHMUZR 5.50 40 KG 10 MT 250 993 248,250 13,654
JEERAUNJHA 9.00 100 KG 3 MT 30 14583 437,490 39,374
POTATO 5.50 100 KG 15 MT 150 624.8 93,720 5,155
PPRMLGKOC 7.00 100 KG 1 MT 10 22836 228,360 15,985
RMSEEDJPR 5.00 20 KG 10 MT 500 578.3 289,150 14,458
SUGARM200 5.50 10 KG 10 MT 1000 3044 3,044,000 167,420
SYBEANIDR 5.50 100 KG 10 MT 100 2370.5 237,050 13,038
SYOREFIDR 5.25 10 KG 10 MT 1000 623.45 623,450 32,731
TMCFGRNZM 16.50 100 KG 5 MT 50 10880 544,000 89,760
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16. Market Timings of Indian Exchanges
Monday to Friday
 Bullion/ Metals Trading:
During May – October :10.00 am to 11.30 pm
During November – April :10.00 am to 11.55 pm
 Agro Commodities: 10.00 am to 5.00 pm
Saturday
 All Commodities: 10:00 am to 2:00 pm
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17. Order Management
Time Conditions Price Conditions
• Day • Market Order
• Good Till Cancel (GTC) • Limit Order
• Good Till Date (GTD) • Stop Loss Order
• Immediate or Cancel
(IOC)
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18. Clients can trade on both on Exchanges
Online Offline
DEMO
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19. Brokerage
Brokerage Structure Charges
Registration fees Rs.500
(adjustable against brokerage generated
by end of the next month)
Minimum Initial Margin Rs.10,000
Trading Brokerage 0.05%
Delivery Brokerage 0.25%
Exchange/Transaction Rs.4.00 per Lac for NCDEX
Charges Rs 2.50 per Lac for MCX
Stamp Duty Nil
Service Tax 10.30% on brokerage and
Exchange/Transaction charges
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20. Intention Matching
 In case of Intention matching, request from both the
buyers and sellers are sought
 The Intentions should match for
• Quantity – only the minimum quantity of the request
will be matched
• Warehouse Location
 If the intentions do not match both the request are cash
settled with the final settlement price
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21. Sellers Option
 In case of sellers option the seller can opt to deliver at the
warehouse location of choice
 Seller has the following options
• Warehouse Location
• Quantity
 The buyer can give the intention for preferential warehouse
 The buyer is not guaranteed of delivery at the warehouse
given as preference if there are no sellers available
 It is obligatory for the buyer to take delivery, failing which
buyer will be charged penalty as specified by the exchange
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22. Compulsory Delivery
 In case of compulsory delivery all the open position on
the expiry needs to be settled through physical delivery
• Sellers need to deliver
• Buyers need to accept the delivery
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23. 1 kg gold
1 kg Silver
Demat of a Commodity
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24. Process of Demat of a Commodity
Credits
MCX/NCDEX NSDL/CDSL DP
Commodity
R & T Agents
Warehouse
Deposits Commodity
Depositor
QCA
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25. Websites for More information
Relevant websites for commodity
 For Energy: – www.basemetals.com
– www.wtrg.com – www.metalsplace.com
– www.oilspace.com – www.international.standardbank.co
– www.naturalgas.org m
– www.futuresource.com – www.kitcometals.com
– www.gcitrading.com  Other sites
– www.futiresource.com – www.Livecharts.co.uk
– www.forexfactory.com – www.easy-forex.com
 For Bullion: – www.commodityoline.com
– www.gfms.co.uk – www.bloomberg.com
– www.gold.org – www.reuters.in
– www.thebulliondesk.com – www.fxstreet.com
– www.kitco.com – www.kitco.com
– www.goldseek.com – www.kitcometals.com
– www.thebulliondesk.com
– www.123jump.com`
 For Base metals:
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26. Thank You
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