Commodity market has gained immense popularity and has been a center of attraction for most of the traders since ages and the growth of the market depends upon some of the major factors.
Liberalization in commodity and capital market.
Introduction of the derivative market as a new financial tool.
Future contracts are basically the commodity trading in which the derivatives are being guarded by the three bodies of the system. They are the:
Government of India.
Forward market commission
The commodity exchange.
The Government of India regulates several parts and the practices of the commodity market. The economic conditions also effect very much on the movement of various commodities of the commodity market. The commodity exchange has shown stupendous growth since the beginning of the market. There are total twenty two commodity exchanges in India and out of which three are of national level commodity exchange, which are MCX (Multi commodity exchange), NCDEX (National commodity and derivatives exchange), NMCE (National multi commodity exchange of India, Ltd).
The Forward market commission is basically for guarding the interest of the customers and non members. It is for shielding the integrity of the financial market. There are different types of derivatives, which are considered to be important from the view point of trading such as futures, forwards, swap and options.
Forwards is basically an agreement between the two parties over the counter, which involves the buying and selling of the products or goods at a set price. The forwards differentiate from each other in terms of contract size, asset type and expiration date.
Option is a type of some derivative where one party authorizes another party a right of buying and selling commodities.
Futures are basically legalized contracts between sellers and the buyers.
Swap is an exchange of the cash flow, which is fixed for a set period of time between the two parties.
The technical and experienced team analyzes the movement of commodities in the market and properly studies the market trends for the future contracts. The MCX tips are properly studied to provide to the customers in order to provide them the maximum benefit.
So you should look at all the aspects before entering in the trading market.
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