Project Proposal

On Study Of Commodity Market

Submitted by:-Avish
Jain
Nikunj Singh

Literature Review
Dr Premalata (2003) examines the impact of introducing index futures and options
contracts on the volatility of the underlining stock index in India. The results suggest that
futures and options trading have not led to a change in the volatility of the underlying stock
index. Susan Thomas and Ajay Shah (2003) examine the characteristics, growth in liquidity
and turnover of Futures and Options.
Snehal Bandwadekar and Saurabh Ghosh (2003) identify that derivative products
like futures and options on Indian Stock Market have become important instruments of price
discovery, portfolio diversification and risk hedging in recent times. Ashutosh Vashishtha
(2010) examines that derivative turnover has grown from 2365 crores in 2000-01 to Rs
11010482 crores, within a short span of eight years derivative trading in India has surpassed
cash segment in terms of volume and turnovers.
O.P Gupta(2004) study suggest that the overall volatility of the stock market has
declined after the introduction of the index futures for both Nifty and Sensex indices,
However there is no conclusive evidence. Sandeep Srivastava (2005) uses the call and put
option open interest and volume based predictors as given by Bhuyan and Yan (2002). The
results show that these predictors have significant explanatory power with open interest
being more significant as compared to trading volume.
Golaka C Nath (2005) studies the behaviour of volatility in cash market after the
introduction of derivatives. Rajendra P. Chitale (2003) examines issues and impediments in
the use of different types of derivatives available for use by these institutional investors in
India. Sumon Bhaumik and Suchismita Bose (2007) examines the impact of expiration of
derivatives contracts on the underlying cash market on trading volumes, returns and volatility
of returns.

TITLE OF THE PROJECT REPORT

A study of the commodity market
Commodity market
Commodity markets are 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.
Commodity market is an important constituent of the financial markets of any country. Its is
the market where a wide range of products, viz., precious metals ,base metals ,crude oil,
energy and soft commodities like palm oil, coffee etc. are traded. It is important develop a
vibrant, active and liquid commodity market. This would help investors hedge their
commodity risk, take speculative positions in commodities and exploit arbitrage opportunities
in the market.
OBJECTIVE OF THE PROJECT REPORT
To analyze the view of commodity traders
To make understand the process of future commodity trading in India.
To know the investment pattern of commodity traders and people.
SCOPE OF THE STUDY
The study mainly focuses on Indian commodity market, its history and latest developments
in the country in commodities market . The study also keeps a birds-eye view on global
commodity market and its development. The study vastly covered the aspects of commodity
trading , clearing and Settlement mechanisms in Indian commodity exchanges. The scope of
the study is limited to Indian commodity market
Research methodology:

SAMPLE SIZE: 100 random sample size

SAMPLE TYPE: investors

SAMPLE AREA: Ahmedabad city

TOOL USED FOR ANALYSES:

1. Graphical Representation of Analysis:
Pie charts
Line Chart
2. Co-relation

SOURCES OF DATA

Primary Data

Questionnaire
Observation and personal discussion with traders

SECONDARY DATA
1. MAGAZINES.
2. NEWSPAPERS
3. WEBSITES
4. BOOKS
TYPE OF RESEARCH
Based on the objectives of the study, the descriptive research method is used . Descriptive
study is taken up when the researcher is interested in knowing the investor perception in
commodities market. The conclusions will be arrive from the collected data. Statistical
tools would be use to analyze the data collected from the survey.
SURVEY METHOD
A survey will be conduct amongst the investors in Ahmedabad. The
researcher personally will meet the investors, interview them and will get their questionnaires
filled.
TIME LINE
1st june to 31st july 2015

COMPONENTS OF SECURITIES MARKETS

The major components of the securities markets are listed below:
Securities: Shares, Bonds, Debentures, Derivatives, Mutual Fund Units
Intermediaries: Brokers, Sub-brokers, Custodians, Share Transfer Agents, Depository
Participants, Credit Rating Agencies, Merchant Bankers
Issuers of Securities: Companies, Bodies Corporate, Government, Financial Institutions,
Mutual Funds, Banks
Investors in Securities: Individuals, Associations of Persons, Companies, Mutual Funds,
Financial Institutions, Foreign Institutional Investors
Regulators: SEBI, RBI (to a certain extent), Department of Economic Affairs (DEA),
Department of Company Affairs (DCA)
A mutual fund is a type of professionally managed investment fund that pools money from many
investors to purchase securities. While there is no legal definition of the term "mutual fund", it is
most commonly applied only to those collective investment vehicles that are regulated and sold
to the general public. They are sometimes referred to as "investment companies" or "registered
investment companies". Hedge funds are not mutual funds, primarily because they cannot be
sold to the general public.

Liquid fund
Maturity 7 days to 30 days

Short term fund

Maturity 3 to 6 month

Medium term fund

10% return

Dynamic bond fund

10 to 12% return but even return can be negative
Corporate bond fund
High risk

MIP(Monthly income plan)

MIP Is hybrid fund

FMP(fix muturity plan)

FMP is closed end funds

ELSS
Equity-linked savings scheme gives high return

INSURANCE
It has 2 types
-Life insurance
-Non-life insurance

Non life has many types

House, motor, property, product, med claim, marine, catel, crop etc.

Insurance companies (public sector)

1)The Oriental insurance company
2)The National insurance company
3)The New India assurance company
4)United India assurance company

Travel Insurance -Now if someone travel to abroad then person can suffer from many
problems like

Loss of passport-so insurance company can accept claim up to 100$.100$ cover expenses
to find passport.
Loss of luggage-to purchase clothes and necessities up tp 250$.
Flight delay 11 hours-dinner and other expenses person can claim
Plan hijack-150$ for time
Liability insurance-200000$ if person feel insult by some another person of abroad
Education insurance-if person will be sick in abroad then he can claim for loss of his study
part
Mentally disturb for going abroad

Personal accident ins.

Total disable-like if sum1 lost his legs then he will recover full amount
Permanent partial disable-like lost 1 eye then maximum 50% person can claim

Stock Markets: Stock Market is a market where the trading of company stock, both listed
securities and unlisted takes place. It is different from stock exchange because it includes all
the national stock exchanges of the country. For example, we use the term, "the stock
market was up today" or "the stock market bubble."
Stock Exchanges: Stock Exchanges are an organized marketplace, either corporation or
mutual organization, where members of the organization gather to trade company stocks or
other securities. The members may act either as agents for their customers, or as principals
for their own accounts.