Knowledge Gained Through Years of Experience

Course Objectives

The objective of the course is to provide basic skills related to operate in commodities and the ways of investing in it. It will enable the student to take up investment in commodities independently.

Units

Unit I: Introduction to Derivative Market (2 Hours)

Meaning of Derivatives; The Basics of a Derivative; Derivatives Market; Features of Derivatives Markets; Use of Derivatives; Difference between Cash and Derivative Market; Types of Derivatives - Forward Contracts, Futures Contracts, Option Contracts, Swaps; Benefits of Futures Trading

Unit II: Participants of Futures Market (2 Hours)

Hedgers - Short hedging, Long Hedging; Types of hedgers; Speculators - Going Long, Going Short, Categories of Speculators; Arbitrageurs - Cash-n-carry, Spread, Inter-exchange, Inter-commodity

Unit III: Market Mechanism (4 Hours)

Margin- Margin Rate for Futures Contracts, Margin Maintenance, Calculating Futures Margin, Margin in Futures Has Many Benefits; Basic Orders; Advance Orders; Importance of Executing Orders; Traps to Avoid while Executing Orders; Validity; Ways to Position- Spot vs. Futures Positions

Unit IV: Terminologies (2 Hours)

Arbitrage; Ask; Ask Size; At the Market; Back Months; Backwardation; Basis; Bear; Bear Market; Bid; Bid Size; Bull; Bull Market; Bust; Cancel Order; Carrying Charge; Cash Settlement; Clearinghouse; Clearing Margin; Clearing Member; Commission; Contango; Contract; Contract Grade; Contract Month; Convergence; Customer Margin; Daily Trading Limit; Day Order; Day Trader; Day Trading; Default; Deliverable Grades; Delivery; Delivery Commitment; Delivery Month; Delivery Notice; Delivery Points; Delivery Price; Discount; Discount Method; Electronic Order; Grading Certificate; Initial Margin; Last Trading Day; Leverage; Liquidate; Liquidity; Offer; Offset; Position; Position Limit; Position Trader; Price Discovery; Range; Scalp; Scalper; Simulated Trading; Spot; Spot Price; Tick; Time and Sales; Warehouse Receipt