 |
| Net Profit Rs 1600/- |
 |
| Net Profit Rs 1300/- |
www.rpsvinod.com
Wednesday, 31 July 2013
Tuesday, 30 July 2013
How to earn money from Commodity Trading on Day3
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| Net Profit Rs 4500/- |
 |
| Net Profit Rs 6500/- |
Titbits :
According to my observation so far, mcx is managed by well organised BIG guys. If you play along with them, you will be safe, otherwise you are the looser all the time.if you look for small profit, you enjoy the same in intraday. Because BIG profits is not for small traders. Play safe otherwise just watch the PLAY.
Basics of Commodity Trading Day 6
Mainly These Scripts divided into 3 Categories
1. Base Metals
2. Bullions
3. Energy
1. Base Metals 2. Bullions 3. Energy
1. Base Metals 2. Bullions 3. Energy
Alumini (Mini) Gold (Guinea) Crude Oil
Aluminium (Mega) Gold (Mini) Natural Gas
Aluminium (Mega) Gold (Mini) Natural Gas
CopperM (Mini) Gold (Mega)
Copper (Mega) Gold (Petals)
Lead M (Mini) Silver Mic
Lead (Mega) Silver Mini
Nickel M (Mini) Silver Mega
Nickel (Mega)
Zinc M (Mini)
Zinc (Mega)
Copper (Mega) Gold (Petals)
Lead M (Mini) Silver Mic
Lead (Mega) Silver Mini
Nickel M (Mini) Silver Mega
Nickel (Mega)
Zinc M (Mini)
Zinc (Mega)
Symbol
|
Lot
Size (1 Lot)
|
ALUMINI
|
1000
KG
|
ALUMINIUM
|
5000
KG
|
COPPER
|
1000
KG
|
COPPERM
|
250
KG
|
CRUDEOIL
|
100
BBL
|
GOLD
|
100
Grams
|
GOLDM
|
10
Grams
|
GOLDGUINEA
|
8
Grams
|
GOLDPETAL
|
1
Gram
|
LEAD
|
5000
KG
|
LEADMINI
|
1000
KG
|
NATURALGAS
|
1250
mmBtu
|
NICKEL
|
250
KG
|
NICKELM
|
100
KG
|
SILVER
|
30 KG
|
SILVERM
|
5 KG
|
SILVERMIC
|
1 KG
|
ZINC
|
5000
KG
|
ZINCMINI
|
1000
KG
|
Tuesday, 23 July 2013
Bacics of Commodity Trading. Day 5
 |
| Contract Note Ref 2 |
31. What is rolling over of hedge positions?
Rolling over of hedge position means the closing out of existing position in the futures contract and simultaneously taking a new position in a futures contract with a later date of expiry.
32. What is meant by calendar spread?
A calendar spread means taking opposite positions in futures contract of the same commodity with different expiry dates. It is also known as an intra-commodity spread.
33. What is hedge ratio?
Hedge ratio is the ratio of number of futures contracts to be purchased or sold, to the quantity of cash asset that is required to be hedged. It is calculated as product of the coefficient of correlation between the change in cash prices and the change in futures prices, and the ratio between the standard deviation of the change in cash price and the standard deviation of the change of futures prices of the commodity.
34. What is the significance of hedge ratio?
It is significant because the spot price and futures price may not vary in the same proportion. By using this ratio, one can cover his basis risk, which is the difference between the spot price and futures price.
35. What do you mean by convergence of futures price with spot price?
This refers to the tendency of difference between spot and futures contract to decline continuously, so as to become zero on the date on maturity.
36. What is novation?
Some Clearing Houses interpose between buyers and sellers as a legal counter party i.e., the clearing house becomes buyer to every seller and vice versa. This obviates the need for ascertaining credit-worthiness of each counter party and the only credit risk that the participants face is the risk of clearing house committing a default. Clearing House puts in place a sound risk-management system to be able to discharge its role as a counter party to all participants.
37. What is Cash Settlement?
It is a process of settling a futures contract by payment of money difference rather than by delivering the physical commodity or instrument representing such physical
commodity (like, warehouse receipt). In India, most of the future trades are cash settled.
38. Are there any circuit breakers in commodities like in equity markets?
Yes, like equity markets, commodity market has circuit breakers. Exchanges have circuit filters in place. The filters vary from commodity to commodity but the maximum individual commodity circuit filter is 6 per cent. The price of any commodity that fluctuates either way beyond its set price limit will fall in circuit breaker category.
39. What kinds of risks do participants face in derivatives markets?
A.Credit risk: Credit risk on account of default by counter party: This is very low or almost zeros because the Exchange takes on the responsibility for the performance of contracts
B.Market risk: Market risk is the risk of loss on account of adverse movement of price.
C.Liquidity risk: Liquidity risks is the risk that unwinding of transactions may be difficult, if the market is illiquid
D.Legal risk: Legal risk is that legal objections might be raised; regulatory framework might disallow some activities.
E.Operational risk: Operational risk is the risk arising out of some operational difficulties, like, failure of electricity, due to which it becomes difficult to operate in the market.
40. Can I take delivery of the commodity? If yes, how can I do the same?
A settlement takes place either through squaring off your position or by cash settlement or physical delivery. Squaring off is taking a opposite position to the initial stance, which means in the case of an original buy contract an investor would have to take a sell contract.
An investor who intends to give or take delivery would have to inform his broker of the same prior to the start of delivery period. In case of delivery, a warehouse receipt is provided. Delivery is at the option of the seller; a buyer can take delivery only in case of a willing seller. All unmatched/rejected/excess positions are cash settled; all open positions for which no delivery information is submitted are also cash settled.
Under cash settlement, the difference between the contract price and settlement price is to be paid or received. In online commodity trading, client can not go for delivery & all positions are cash settled.
41. What are the costs involved in trading of commodities?
While trading in commodities, with any registered broker, client has to pay certain charges (apart from margin requirements for trading) which are as follows:
1. Brokerage
2. Service tax
3. Education Cess
4. Exchange Transaction Charges
Monday, 22 July 2013
Basics of Commodity Trading Day 4
21. What is “Contango” in commodity trading?
Contango means a situation, where futures contract prices are higher than the spot price and the futures contracts maturing earlier. It arises normally when the contract matures during the same crop season. In a well-integrated market, Contango is equal to the cost of carry viz. Interest rate on investment, loss on account of loss of weight or deterioration in quantity etc.
22. What is meant by backwardation?
This situation arises when the price of futures contract is below the spot price of the same commodity. This happens when there is a shortage for the underlying asset in the cash market, but also there is an expectation that the supply of the commodity will increase in the future.
23. What is initial margin?
It is the minimum percentage of the contract value required to be deposited by the members/clients to the exchange before initiating any new buy or sell position. This
must be maintained throughout the time their position is open and is returnable at delivery, exercise, expiry or closing out.
24. What do you mean by delivery period margin?
It is the extra margin imposed by the exchange on the contracts when it enters the concluding phase i.e. it starts with tender period and goes up to delivery/settlement of trade. This amount is applicable on both the outstanding buy and sell positions.
25. What is Mark-to-market (MTM)?
Mark-to-market margins (MTM or M2M) are payable based on closing prices at the end of each trading day. These margins will be paid by the buyer if the price declines
and by the seller if the price rises. This margin is worked out on difference between the closing/clearing rate and the rate of the contract (if it is entered into on that day) or the previous day's clearing rate. The Exchange collects these margins from buyers if the prices decline and pays to the sellers and vice versa.
26. What is meant by the term “tender period”?
The contract enters into the tender period a few days before the expiry. This enables the members to express their intention whether to give or take delivery.
27. What is due date rate?
It is the rate at which the contract is settled on the expiry date. Usually it is the average of the spot prices of the last few trading days (as specified by the exchange) before the contract maturity.
28. What is spread?
Spread is the difference between prices of two futures contracts of the same underlying commodity. Futures market can be a normal market or an inverted market. If the price of the far month futures contract is higher than the near month one, then it is referred to as “normal market”. On the other hand, if the price of a far month futures contract is lower than the near month one, then the situation can be referred to as “inverted market”
29. What is bull spread in commodity futures?
In most commodities and financial derivatives market, the term refers to buying contracts maturing in nearby month, and selling the deferred month contracts, to profit from the wide spread which is larger than the cost of carry.
30. What is bear spread in commodity futures?
In most of commodities and financial derivatives market, the term refers to selling the nearby contract month, and buying the distant contract, to profit from saving in the cost of carry.
Contango means a situation, where futures contract prices are higher than the spot price and the futures contracts maturing earlier. It arises normally when the contract matures during the same crop season. In a well-integrated market, Contango is equal to the cost of carry viz. Interest rate on investment, loss on account of loss of weight or deterioration in quantity etc.
22. What is meant by backwardation?
This situation arises when the price of futures contract is below the spot price of the same commodity. This happens when there is a shortage for the underlying asset in the cash market, but also there is an expectation that the supply of the commodity will increase in the future.
23. What is initial margin?
It is the minimum percentage of the contract value required to be deposited by the members/clients to the exchange before initiating any new buy or sell position. This
must be maintained throughout the time their position is open and is returnable at delivery, exercise, expiry or closing out.
24. What do you mean by delivery period margin?
It is the extra margin imposed by the exchange on the contracts when it enters the concluding phase i.e. it starts with tender period and goes up to delivery/settlement of trade. This amount is applicable on both the outstanding buy and sell positions.
25. What is Mark-to-market (MTM)?
Mark-to-market margins (MTM or M2M) are payable based on closing prices at the end of each trading day. These margins will be paid by the buyer if the price declines
and by the seller if the price rises. This margin is worked out on difference between the closing/clearing rate and the rate of the contract (if it is entered into on that day) or the previous day's clearing rate. The Exchange collects these margins from buyers if the prices decline and pays to the sellers and vice versa.
26. What is meant by the term “tender period”?
The contract enters into the tender period a few days before the expiry. This enables the members to express their intention whether to give or take delivery.
27. What is due date rate?
It is the rate at which the contract is settled on the expiry date. Usually it is the average of the spot prices of the last few trading days (as specified by the exchange) before the contract maturity.
28. What is spread?
Spread is the difference between prices of two futures contracts of the same underlying commodity. Futures market can be a normal market or an inverted market. If the price of the far month futures contract is higher than the near month one, then it is referred to as “normal market”. On the other hand, if the price of a far month futures contract is lower than the near month one, then the situation can be referred to as “inverted market”
29. What is bull spread in commodity futures?
In most commodities and financial derivatives market, the term refers to buying contracts maturing in nearby month, and selling the deferred month contracts, to profit from the wide spread which is larger than the cost of carry.
30. What is bear spread in commodity futures?
In most of commodities and financial derivatives market, the term refers to selling the nearby contract month, and buying the distant contract, to profit from saving in the cost of carry.
Saturday, 20 July 2013
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