Isnare Free Articles
Authors Contents [Add OpenSearch]
Distribute your articles to more than 6,000+ sites and 40,000+ email group publisher subscribers for as low as $2 / article...
Index  Article Directory  Finances
Embed this Article  
Kratika Sinha

Kratika Sinha x 1 articles

Liked the article? Consider buying me a beer!
$

Most Recent Videos Most Recent Videos

Commodity are the raw or primary agricultural product that could bought or sold such as gold, silver, copper, pulses etc. Derivative contract are the contract whose value is derived from underlying asset there are some types of derivative.

Forward

Swap

Future

Option

Concept of future or commodity derivative comes when the farmers have to travel a huge distance to sold there goods or agricultural produce at market place, there may be a probability that the produced may be rotted. and he could not sold that on accepted price due to some bad quality specification.

on other hand buyer and seller have risk of price uncertainty.

To avoid this farmer and buyer make a contract that at fixed future date will deliver the produced and will accept the delivery (Buyer) at fixed price. that is called derivative contract.

in this above case there are some limitation :

Buyer will make the payment or not

Seller will deliver the goods or not due to future price uncertainty

Seller will deliver the goods or not .

the above example that we have discuss that is forward contract a OTC (Over the Counter : the trade occur between the two parties only) contract in which above limitation are there because both buyer or seller doesn't have to pay any advance amount or margin as security in case any party default. but Future are the standardized from forward contract.

In commodity future contract a investor ( both buyer and seller) have to pay a margin amount.for this underlying asset is spot market price of that particular commodity future contract on the basis of which future contract price decided.

for ex. if a investor buy a Aug Future contract of gold buying by paying a initial margin to exchange, he is making a contract with a seller that before or on expiry will accept the delivery by paying a full amount.

and seller making a contract that will deliver the gold to buyer on execution of contract.

Commodity tips future contract are the Exchange Traded Security in which Exchange work as mediator. by chance if any party default some penalty will charged on it by exchange, to ensure a fair play. be cause in market there are so many buyer and seller are available .there may be a possibility that the person who is delivering may not be fulfill the quality specification of that particular commodity.

while in spot market instant delivery is possible and buyer and seller meet with each other to exchange the commodities.

In commodity future contract a investor ( both buyer and seller) have to pay a margin amount.for this underlying asset is spot market price of that particular commodity future contract on the basis of which future contract price decided.

for ex. if a investor buy a Aug Future contract of gold buying by paying a initial margin to exchange, he is making a contract with a seller that before or on expiry will accept the delivery by paying a full amount.

and seller making a contract that will deliver the gold to buyer on execution of contract.

Commodity tips future contract are the Exchange Traded Security in which Exchange work as mediator. by chance if any party default some penalty will charged on it by exchange, to ensure a fair play. be cause in market there are so many buyer and seller are available .there may be a possibility that the person who is delivering may not be fulfill the quality specification of that particular commodity.

while in spot market instant delivery is possible and buyer and seller meet with each other to exchange the commodities.

Rate this article:
Signature – Sadhna Tiwari [E-MARKETING EXECUTIVE] | Ways2Capital Provides MCX tips, intraday stock tips, NCDEX tips, forex tips, commodity tips . We also provide full support during market hours. | TO GET MORE DETAILS- VISIT US ON http://www.ways2capital.com | CONTACT US ON 0731-6554125
Important NoticeDISCLAIMER: All information, content, and data in this article are sole opinions and/or findings of the individual user or organization that registered and submitted this article at Isnare.com without any fee. The article is strictly for educational or entertainment purposes only and should not be used in any way, implemented or applied without consultation from a professional. We at Isnare.com do not, in anyway, contribute or include our own findings, facts and opinions in any articles presented in this site. Publishing this article does not constitute Isnare.com's support or sponsorship for this article. Isnare.com is an article publishing service. Please read our Terms of Service for more information.

Most Recent Articles

HPE2-E67 Real PDF Exam Material

An Article by Brent Fowler in Business

5 hours ago

Question: 1Which new IT consumption model is a pay-as-you-deploy model that allows customers to more efficiently adapt to business changes, and to take a more flexible, scalable approach to capacity planning. A. HPE Pre-ProvisioningB. HPE Flexible Asset Return for ServersC. HPE Subscription for ServersD...

HPE2-E67 Latest Certification Tests

An Article by Dennisng Ng in Computers and Technology

6 hours ago

Question: 1Which new IT consumption model is a pay-as-you-deploy model that allows customers to more efficiently adapt to business changes, and to take a more flexible, scalable approach to capacity planning. A. HPE Pre-ProvisioningB. HPE Flexible Asset Return for ServersC. HPE Subscription for ServersD...

Check Out These Crucial Advantages of Learning Salsa at Top Salsa Tanzen

An Article by Salsa People in Entertainment

7 hours ago

Creativity and artistic excellence share a unique bond with one another. Creative expressions will help you emote your feelings and give wings to your desire. It’s right here that dance emerges as a unique medium. Irrespective of the tunes, beats, and rhythm, dance can help you express yourself in an innovative manner...

Improve Your Valentine’s Day Plans With a Party Bus Rental of Phoenix

An Article by Jordan I. Paige in Entertainment

7 hours ago

Valentine’s Day is significant to some and an excuse to throw a great party for others. Regardless of your motivation, a Party Bus Rental of Phoenix is sure to please the romantics as well as the cynics among your group. The party planned will be enhanced, liberating, and personalized. Memorable QualityIn order to create an atmosphere conducive to making memories, the arrangements chosen should be unique...

Maxime the Experience in Washington, DC Via Tour Buses

An Article by James L. Ramos in Travel

9 hours ago

Washington, DC is an affordable and fascinating place to visit, and with the current upheaval in the federal government, the time presents a powerful learning experience. Regardless of your political bent, express your patriotic interests with a visit to Washington, DC with tour buses to help maximize the experience...

Explore the Mesmerizing Beauty of India With Fly Back India

An Article by Flyback India in Travel

10 hours ago

The mystic beauty and enigmatic charm of India has always allured the tourists from around the world. People from all over the world come to India seeking salvation, peace and tranquility. Some come to experience the hospitality of the country that introduces that to a new lever of humbleness and gratitude...

DSDPS-200 PDF Download

An Article by Dennisng Ng in Home Management

10 hours ago

Question: 1A Group Manager sees only one connection for a volume connected to a 2012 host that runs two iSCSI NICs. What are three possible causes of this problem. (Choose three. )A. The second iSCSI NIC doesNOThave flow control enabled. B. The second iSCSI NIC doesNOThave Jumbo Frames enabled. C. Multi-pathing was NOT applied on the initial connection...

MS Exam 70-534 Architecting Microsoft Azure Solutions 70-534 Practice Exam Killtest

An Article by Delia Green in Education

10 hours ago

With Killtest MS Exam 70-534 Architecting Microsoft Azure Solutions 70-534 Practice Exam, you can pass your Microsoft 70-534 Architecting Microsoft Azure Solutions certification exam. Request real Microsoft certification 70-534 practice exam, certification exam, study materials or test questions. Just choose Killtest 70-534 study materials at once...

Get to Your Sweetie on Valentine’s Day With a Baltimore Airport Limo

An Article by Friee David in Travel

10 hours ago

As you anticipate your Valentine’s trip, the actual components of travel are probably not positive elements that you’re looking forward to. The stress and exhaustion that can darken your travel is avoidable. By booking a Baltimore Airport Limo, you can reach your sweetie quickly while maintaining a positive outlook...

C9550-512 Free Demo Practice Test Software

An Article by Brent Fowler in Computers and Technology

11 hours ago

Question: 1What common standard is used by both the internal IBM Business Process Manager document store and external Enterprise Content Management servers. A. DatabasesB. Folder structureC. Application serveD. CMIS-based interfacesAnswer: Dhttps://www. ibm. com/developerworks/community/files/basic/anonymous/api/library/cfa136f0-30c1-4177-9901-62c05d900c5f/document/759d7370-2260-47c3-9f66-17a706030d2c/mediaQuestion: 2Which status is available by default for Process Application snapshots...

AnnanDaleInteriors - Best Places to Buy Furniture Online

An Article by KimA Thompson in Home Management

11 hours ago

Purchased a new house recently. Or maybe an office. You must be looking for that one unique piece that completes and complements your entire room, or maybe you want to change the entire look and design. Look no further. You will get all the answers here. When it comes to buying furniture, we visit store after store only to find that either the furniture does not suit our needs or is too expensive...

C9550-512 Practice

An Article by Dennisng Ng in Computers and Technology

12 hours ago

Question: 1What common standard is used by both the internal IBM Business Process Manager document store and external Enterprise Content Management servers. A. DatabasesB. Folder structureC. Application serveD. CMIS-based interfacesAnswer: Dhttps://www. ibm. com/developerworks/community/files/basic/anonymous/api/library/cfa136f0-30c1-4177-9901-62c05d900c5f/document/759d7370-2260-47c3-9f66-17a706030d2c/mediaQuestion: 2Which status is available by default for Process Application snapshots...

The Beginner’s Guide to Wedding Photography in Maui and Couples Photography in Maui and How a Good Wedding Photographer Can Reduce Your Problems to a Minimum

An Article by Vikram KR in Marriage

13 hours ago

As time goes by and people start looking beyond their own horizon to find more places to explore, trends like that of destination weddings start to emerge. The day you picked your wedding to have a destination theme like that of Maui, experienced people might have told you that things were going to get tough and not just because of the difficulty of finding a photographer who would deliver a good service when it came to wedding photography in Maui and couples photography in Maui...

Updated VCA6-DCV Certification 1V0-621 Practice Exam

An Article by Kruis Barry in Education

14 hours ago

Are you ready and confident to pass VMware 1V0-621 exam. Passcert Updated VCA6-DCV certification 1V0-621 practice exam will be your favorable aid because its quality is wonderful enough to guarantee your pass. Updated VCA6-DCV certification 1V0-621 practice exam, 1V0-621 online test, all available from Passcert...

CRM 2016 MB2-710 Certification Practice Test

An Article by Kruis Barry in Education

15 hours ago

Passcert CRM 2016 MB2-710 certification practice test allows candidates to learn in the case of mock examinations. You can control the kinds of questions and some of the problems and the time of each test. In the site of Passcert, you can prepare for the exam without stress and anxiety. At the same time, you also can avoid some common mistakes...

MLA Style Citation:
Sinha, Kratika "Trading in Commodity Derivatives." Trading in Commodity Derivatives. 10 Jan. 2017 Isnare.com. 30 Mar. 2017 <https://www.isnare.com/?aid=1962671&ca=Finances>.
APA Style Citation:
Sinha, Kratika (2017, January 10). Trading in Commodity Derivatives. Retrieved March 30, 2017, from https://www.isnare.com/?aid=1962671&ca=Finances
Chicago Style Citation:
Sinha, Kratika "Trading in Commodity Derivatives." Trading in Commodity Derivatives Isnare.com. https://www.isnare.com/?aid=1962671&ca=Finances
Copy and paste the code below to embed this article:
<a class="embedly-card" href="https://www.isnare.com/?aid=1962671&ca=Finances">Trading in Commodity Derivatives</a> <script>!function(a){var b="embedly-platform",c="script";if(!a.getElementById(b)){ var d=a.createElement(c);d.id=b,d.src=("https:"===document.location.protocol?"https":"http")+"://cdn.embedly.com/widgets/platform.js"; var e=document.getElementsByTagName(c)[0];e.parentNode.insertBefore(d,e)}}(document);</script>