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Commodity markets Vs share markets

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  1. Introduction
    1. Commodity market
    2. Objectives
  2. Research methodology
  3. Descriptive work of subtopic on study
    1. Share market
    2. Offer for sale
    3. Dividends
    4. Preference shares
    5. Which factors affect the share price of a company?
    6. Asset allocation
    7. Advance-decline (A-D) line
    8. American Depository Receipts (ADR) (U.S.)
    9. Cumulative convertible preference shares
  4. Libor: London Interbank offer rate
    1. Margin
    2. Mark to the market
    3. Market capitalization
    4. Market timing
    5. Mid-capitalization (mid-cap) stock
  5. Morgan Stanley capital international indexes
  6. National Market System (NMS)
  7. Rating agency or service
  8. Securities and Exchange Commission (SEC)
  9. Underlying investment
  10. Commodity v/s stock market
  11. Data analysis and interpretation
  12. Conclusion
  13. Bibliography

Indian markets have recently thrown open a new avenue for retail investors and traders to participate in: commodity derivatives. For those who want to diversify their portfolios beyond shares, bonds and real estate, commodities are the best option. Till some months ago, this wouldn't have made sense. For retail investors could have done very little to actually invest in commodities such as gold and silver -- or oilseeds in the futures market. This was nearly impossible in commodities except for gold and silver as there was practically no retail avenue for punting in commodities. However, with the setting up of three multi-commodity exchanges in the country, retail investors can now trade in commodity futures without having physical stocks!

Commodities actually offer immense potential to become a separate asset class for market-savvy investors, arbitrageurs and speculators. Retail investors, who claim to understand the equity markets may find commodities an unfathomable market. But commodities are easy to understand as far as fundamentals of demand and supply are concerned. Retail investors should understand the risks and advantages of trading in commodities futures before taking a leap. Historically, pricing in commodities futures has been less volatile compared with equity and bonds, thus providing an efficient portfolio diversification option.

Like any other market, the one for commodity futures plays a valuable role in information pooling and risk sharing. The market mediates between buyers and sellers of commodities, and facilitates decisions related to storage and consumption of commodities. In the process, they make the underlying market more liquid.

[...] OBJECTIVES: Share market and Commodity market have many differences like: Open and Closing Time, Expire date, Nature, Taxable rate, Hedge conditions, Sell and Purchase factor, Demand and Supply factor. These differences have major impact on investor's investment and at the turnover rate of both markets. We have following objective for research: To identify the greater impact of Share market or Commodity market in the investor's mind. To analyze those factor which have major difference between Share market and Commodity market. [...]

[...] Some market Participant's default, which could cause the Financial or Commodity markets or Share market to fall down: Some market participant's default like Harshal Mehta kand and Mr. Zaveri had a position closed so there is a big volatility in the market and the top level participants leave their position and they sell off their position because of this the selling trend started. The market fell down and the capital market also suffered. Major Recent crisis(last 10 years) in the market which operated by the participant: 1. [...]

[...] Together they represent more than 80% of the equity capital on share markets throughout the world. Eventually, the indexes will include every country where shares can be purchased. Market capitalization weighting means that those companies with higher market capitalizations, figured by multiplying the current price per share by the number of existing shares, have a greater impact on the index than shares with smaller capitalizations. Global market performance is also tracked in eight geographically defined regional indexes and in the Dow Jones World Share Index, a composite of the global indexes. [...]

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