Explanation of Commodity Derivatives Market Trade
Why do you think we Indians love to invest in Real Estate and Gold? The answer is simple. It is because we believe to invest in physical assets which we can see and touch as compared to financial assets. In India every household has some quantity of gold whether in the form of bar or jewellery and is considered to be auspicious in the wedding. It is considered to be safe haven in the time of political unrest and also acts as hedge against inflation. It is often seen that the yellow metal reacts sharply during any political instability or in the time of crisis. Its acs as a hedge against inflation!
Commodities expecially the agricultural and energies exhibit strong seasonal patterns. There are high chances that seasonal influences would bias price movement.
Fundamental analysis focuses on supply and demand variables and their relationship to prices. The main idea is to understand the fundamental forces of supply and demand and analyze how they affect prices. These variables are typically combined in balance sheets and can be used in making predictions.
Commodities can be classified into soft commodities and hard commodities. Soft commodities are agricultural products such as coffee, wheat, cocoa and sugar. Hard commodities are mined, such as oil and gold.
Check out Fundamental Analysis Of Commodities Course for better understanding.
A commodity market is a market which trades in primary economic sector rather than manufactured products. SEBI regulates Commodity Derivative Markets Since September 2015. Prior to that Forward Market commission, Overseen by Ministry of Consumer Affairs regulated Commodities.
Check out NSE Academy Certified Currency & Commodity Markets for better understanding.