Docstoc

Stock Broking

Document Sample
Stock Broking Powered By Docstoc
					SHARE BROKING SERVICE SECTOR PROFILE


There are several national as well as local players in stock trading services which are providing
various services to their customers like online trading, portfolio management system, stock
broking etc. Various key players in this sector are:


KEY PLAYERS1:

   5Paisa.com - Online trading, live stock quotes and market research
   Advani Share Brokers - Share broking and market research       services
   Anand Rathi Securities - Portfolio management, corporate finance,                equity & fixed
    income brokerage services
   Brescon Group - Advisory and broking services
   CIL Securities - Stock broking & merchant banking services
   CRN India - Trends of stock market, trading tips, chat etc
   Churiwala Securities - Stock trading, quotes and market analysis
   DSP Merrill Lynch - Investment banking and brokerage services
   Dalmia Securities - Stock broking & depository services
   EquityTrade - Stock trading, company news & market research
   Gandhi Securities - Stock broking and investment services
   Hasmukh Lalbhai - Stock trading services
   Idafa Investments - Stock broking services
   India Market Access - Offers stock broking, portfolio management and investment banking
    services
   Investsmart India - Personal finance advisory & online brokerage services
   Kisan Ratilal Choksey Shares - Stock broking and e-trading services
   Kotak Securities - Brokerage services & retail distributor of financial securities
   Manubhai Mangaldas Securities - Stock broking and market analysis
   Moneypore - Investment and broking services
   Motilal Oswal - Online trading, live BSE and NSE quotes
   Navia Markets - Stock broking, IPO and mutual funds services
   Parag Parikh - Stock broking and portfolio management
   Parsoli Corporation - Investment management & stock trading services
   Pratibhuti Viniyog - Stock broking services
   Prudential - Investment management services
   Quantum Securities - Offers broking and portfolio management services.
   Sivan Securities - offers services related investment banking & stock broking with a focus on
    South India.
   Skindia Finance - Brokerage firm focusing on GDR arbitrage, equities & debt
   Stock Holding Corporation of India - Custody management, safekeeping & stock broking
    services
   StockMarkit.com - Stock quotes, news, market indicators etc
   Sunidhi Consultancy - Stock broking, portfolio management & equity research
   Techno Shares - Stock broking and portfolio management
   Valia Consultancy - Stock investment and trading consultancy1




COMPANY PROFILE:
SSKI HISTORY:
                         Sevaklal Sevantilal Kantilal Ishwarlal
                                   Securities Private Limited.
   Founded in 1922, it is one of India‟s oldest brokerage houses having over Eighty years of
    broking experience.
   Founding member of the Stock Exchange, Mumbai and pioneer institutional broker.
   SSKI is the only domestic player in a market crowded by 44 multinational securities firm.
   Foray into institutional broking and corporate finance 20 years ago. SSKI group also
    comprises Institutional broking division caters to the largest domestic and foreign
    institutional investors, the corporate finance division focuses on niche areas such as
    infrastructure, telecom and media. SSKI holds a sizeable portion of the market in each of
    these segments.
   Forerunner of investment research in the Indian market, SSKI provide the best research
    coverage amongst broking houses in India. The company‟s research team was set up in
    December 1992 and is rated as one of the best in the country. Voted four times as the top
    domestic brokerage house by Asia money survey, SSKI is consistently ranked amongst the
    top domestic brokerage houses in India.
   Retail broking started in 1985.
   Research group was set up in December 1992.
   It acts as a pioneer if investment research in the Indian market aimed at generating quick
    investment ideas.
   Group interest Investment Banking, Institutional Broking and Retail Broking.It occupies 65%
    of business share from foreign institutional investors.
   SSKI named its online division as “Sharekhan” on February 8, 2000 coinciding with the
    launch of its website.
       Sharekhan is a share broking and retail broking arm of SSKI, an organization with more than 80
years of trust and credibility in the stock market. Retail Distribution Started In 1998. SSKI is a veteran
equities solutions company with over 8 decades of experience in the Indian stock markets. It helps the
customers/people to make informed decisions and simplifies investing in stocks. SSKI named its online
division as a Sharekhan and it is into retail broking. The business of the company overhauled 6 years
ago on February 8, 2000. It acts as a discount brokerage house to a full service investment solution
provider. It has specialized research product for the small investors and day traders. Sharekhan has a
shop in 170 cities across India.
They have talent pool of experienced professionals specially designated to guide customers when they
need assistance, which is why investigating with Sharekhan is bound to be a hassle-free
experience for customers!
The Sharekhan provides its customers First Step program, built specifically for new investors, which
guide throughout investing lifecycle.
They have 510 share shops across 170 cities in India to get a host of trading related services.


ABOUT SHAREKHAN
   SSKI named its online division as SHAREKHAN and it is into retail broking.
   It acts as a discount brokerage house to a full service investment solutions provider.
   It has specialized research product for the small investors and day traders.
   The site was also launched on February 8, 2000 and named it as www.sharekhan.com
   The Speed Trade account of Sharekhan is the next generation technology product launched
    on April 17, 2002.
   It offers its customers with the trade execution facilities on the NSE and BSE, for cash as
    well as derivatives, depository services.
   Ensures convenience in Trading Experience: Sharekhan‟s trading services are designed to
    offer an easy, hassle free trading experience, whether trading is done daily or occasionally.
    The customer will be entitled to a host of value added services in the investment process
    depending on his investing style and frequency offers a suite of products and services,
    providing the customers with a multi-channel access to the stock markets.
   It gives advice based on extensive research to its customers and provides them with relevant
    and updated information to help him make informed about his investment decisions.
   Sharekhan offers its customers the convenience of a broker-DP.
   It helps the customers meet his pay in obligations on time thereby reducing the possibility of
    auctions. The company believes in flexibility and therefore allows accepting late instructions
    without any extra charge. And execute the instruction immediately on receiving it and
    thereafter the customer can view his updated account statement on Internet.
   Sharekhan depository services offer Demat services to individual and corporate investors. It
    has a team of professionals and the latest technological expertise dedicated exclusively to
   their Demat department. A customer can avail of Demat, repurchase and transmission
   facilities at any of the Sharekhan branches and business partners outlets.


BRAND NAME


The company as a whole in its offline business has named itself as SSKI Securities Private
Limited – Sevaklal Sevantilal Kantilal Ishwarlal Securities Private Limited. The company has
preferred to name themselves under a blanket family name.
But in its online division started since 1997, the company preferred to name itself as
“SHAREKHAN”. The Brand name “SHAREKHAN” itself suggests the business in which the
company is dealing so that the customer could easily identify the product or service category.


   SERVICES PROVIDED BY SHAREKHAN
              Online Services
              Offline Services
              Depository Services
              Equity and Derivatives Trading
              Fundamental Research
              Technical Research
              Portfolio Management
              Commodities Trading
              Dial-n-trade
              Share shops


1. Online Services:
    1. Mutual Funds
    2. Commodity Futures
    3. PMS (Portfolio Management Service)
    4. Technical PMS
    5. Demat Services
    6. Share shops




2. Offline Services:


Trading with the help of Dealer
 1. Trading without credit
 2. By calling to the Share shops
 3. Credit facility (Only in Delivery-based)
 4. T+2 facility
    5. Special website for Offline Clients: www.mysharekhan.com
    6. Physical contract notes


Types of Account


         Classic A/c
         Speed-trade




[A] Classic A/c:
Features of Classic A/c:
     Online trading account for investing in Equities and Derivatives via sharekhan.com
     Integration of: Online trading + Bank + Demat account.
     Instant cash transfer facility against purchase & sale of shares.
     Make IPO bookings.
     You get Instant order and trade confirmations by e-mail
     Streaming Quotes.
     Personalized Market Scan with your own customized stock ticker.
     Single screen interface for cash and derivatives.


[B] Speed-trade:
    Features of Speed-trade:

     Instant order Execution & Confirmation
     Single screen trading terminal
     Real-time streaming quotes, tic-by-tic charts
     Market summary (most traded scrip, highest value and lots of other relevant statistics)
     Hot keys similar to a brokers terminal
     Alerts and reminders
     Back-up facility to place trades on Direct Phone lines
       Single screen interface for cash and derivatives

[C] Dial-n-trade:

Features of Dial-n-trade:

        Two numbers for placing orders for customers: Toll free number: 1-800-22-7050. For
         people with difficulty in accessing the toll-free number, a Reliance number 30307600
         which is charged at Rs. 1.50 per minute for STD calls.Automatic funds transfer with phone
         banking (for Citibank and HDFC bank customers.

        Simple and Secure Interactive Voice Response based system for authentication.

        No waiting time. Enter TPIN to be transferred to Sharekhan‟s telebrokers.

        One can also get the trusted, professional advice of Sharekhan‟s telebrokers.

        After hours order placement facility between 8.00 am and 9.30 am (timings to be extended
         soon.

BANK AFFILIATION


Sharekhan has affiliation with 7 banks, which allows its customers to enjoy the facility of instant
credit and transfer of funds from his savings bank account to his Sharekhan trading account. The
Affiliated banks are as follows:


       HDFC BANK
       UTI BANK
       CITI BANK
       ORIENTAL BANK OF COMMERCE
       IDBI BANK
       UBI BANK
       CORPORATION BA
PROMOTION TOOLS AND ADVERTISEMENT OF SHAREKHAN


       Promotion
Online share trading is totally a new concept in Indian market. Generally investor doesn‟t like to
come from conventional way of share trading. Sharekhan has introduced this product in the
concept and products are still new in the market. Therefore the company has undertaken
extensive promotion campaign to create awareness about the product. Sharekhan adopts the
following tools for promoting the product.


      Internet
      Tele Marketing
      Retail Share Shops
      Franchisee Owners
      Sales Force


       Advertising
Company advertises its product through TV media on channels like CNBC, Print Media-in
leading dailies and outdoors media. It advertises itself as an innovative brand with a cartoon of
tiger-called SHERU. Besides attractive and colorful brochures as well as posters are used giving
full details about the product. Mails are sent to people togging on to sites like moneycontrol.com
and rediff.com.
Commodity

A commodity is some good for which there is demand, but which is supplied without qualitative
differentiation across a market. It is fungible, i.e. the same no matter who produces it. Examples
are petroleum, notebook paper, milk or copper.[1] The price of copper is universal, and fluctuates
daily based on global supply and demand. Stereo systems, on the other hand, have many aspects
of product differentiation, such as the brand, the user interface, the perceived quality etc. And,
the more valuable a stereo is perceived to be, the more it will cost.

In contrast, one of the characteristics of a commodity good is that its price is determined as a
function of its market as a whole. Well-established physical commodities have actively traded
spot and derivative markets. Generally, these are basic resources and agricultural products such
as iron ore, crude oil, coal, ethanol, salt, sugar, coffee beans, soybeans, aluminum, copper, rice,
wheat, gold, silver, palladium, and platinum. Soft commodities are goods that are grown, while
hard commodities are the ones that are extracted through mining.

Definition of comodity

A physical substance, such as food, grains, and metals, which is interchangeable with another
product of the same type, and which investors buy or sell, usually through futures contracts. The
price of the commodity is subject to supply and demand. Risk is actually the reason exchange
trading of the basic agricultural products began. For example, a farmer risks the cost of
producing a product ready for market at sometime in the future because he doesn't know what
the selling price will be.

http://www.investorwords.com/975/commodity.html

History of commodity market

The modern commodity markets have their roots in the trading of agricultural products. While
wheat and corn, cattle and pigs, were widely traded using standard instruments in the 19th
century in the United States, other basic foodstuffs such as soybeans were only added quite
recently in most markets.[ For a commodity market to be established, there must be very broad
consensus on the variations in the product that make it acceptable for one purpose or another.

The economic impact of the development of commodity markets is hard to overestimate.
Through the 19th century "the exchanges became effective spokesmen for, and innovators of,
improvements in transportation, warehousing, and financing, which paved the way to expanded
interstate and international trade."[



India Commodity Market
India commodity market consists of both the retail and the wholesale market in the country. The
commodity market in India facilitates multi commodity exchange within and outside the country
based on requirements. Commodity trading is one facility that investors can explore for investing
their money. The India Commodity market has undergone lots of changes due to the changing
global economic scenario; thus throwing up many opportunities in the process. Demand for
commodities both in the domestic and global market is estimated to grow by four times than the
demand currently is by the next five years.




 Commodity Trading

Commodity trading is an interesting option for those who wish to diversify from the traditional
options like shares, bonds and portfolios. The Government has made almost all commodities
entitled for futures trading. Three multi commodity exchanges have been set up in the country to
facilitate this for the retail investors. The three national exchanges in India are:

      Multi Commodity Exchange (MCX)
      National Commodity and Derivatives Exchange (NCDEX)
      National Multi-Commodity Exchange (NMCE)

Commodity trading in India is still at its early days and thus requires an aggressive growth plan
with innovative ideas. Liberal policies in commodity trading will definitely boost the commodity
trading. The commodities and future market in the country is regulated by Forward Markets
commission (FMC).
http://www.indianmba.com/Occasional_Papers/OP62/OP62.jpg
        FMC

Forward Markets Commission (FMC) headquartered at Mumbai, is a regulatory authority
which is overseen by the Ministry of Consumer Affairs, Food and Public Distribution, Govt.
of India. It is a statutory body set up in 1953 under the Forward Contracts (Regulation) Act,
1952.

" The Act provides that the Commission shall consist of not less than two but not exceeding four
members appointed by the Central Government out of them being nominated by the Central
Government to be the Chairman thereof. Currently Commission comprises three members
among whom Shri B.C. Khatua, IAS, is the Chairman, Shri Rajeev kumar Agarwal, IRS and
Shri D.S.Kolamkar, IES are the Members of the Commission."

http://www.fmc.gov.in/




              Multi Commodity Exchange (MCX)


  Headquartered in the financial capital of India, Mumbai, Multi Commodity Exchange of
  India Ltd (www.mcxindia.com) is a demutualised nationwide electronic commodity futures
  exchange set up by Financial Technologies (India) Ltd. with permanent recognition from
  Government of India for facilitating online trading, clearing & settlement operations for
  futures market across the country. The exchange started operations in November 2003.


  MCX has achieved three ISO certifications including ISO 9001:2000 for quality
  management, ISO 27001:2005 - for information security management systems and ISO
  14001:2004 for environment management systems. MCX offers futures trading in more than
  40 commodities from various market segments including bullion, energy, ferrous and non-
  ferrous metals, oil and oil seeds, cereal, pulses, plantation, spices, plastic and fibre. The
  exchange strives to be at the forefront of developments in the commodities futures industry
  and has forged strategic alliances with various leading International Exchanges, including
  Tokyo Commodity Exchange, Chicago Climate Exchange, London Metal Exchange, New
  York Mercantile Exchange, Bursa Malaysia Derivatives, Berhad and others.
  Key shareholders
  Promoted by Financial Technologies (India) Ltd, MCX enjoys the confidence of blue chips
  in the Indian and international financial sectors. MCX‟s broadbased strategic equity partners
  include, NYSE Euronext, State Bank of India and its associates (SBI), National Bank for
  Agriculture and Rural Development (NABARD), National Stock Exchange of India Ltd.
  (NSE), SBI Life Insurance Co. Ltd., Bank of India (BOI) , Bank of Baroda (BOB), Union
  Bank of India, Corporation Bank, Canara Bank, HDFC Bank, Fid Fund (Mauritius) Ltd. - an
  affiliate of Fidelity International, ICICI Ventures, IL&FS, Kotak group, Citi Group and
  Merrill Lynch.


www.mcxindia.com




                      National Commodity and Derivatives Exchange
National Commodity & Derivatives Exchange Limited (NCDEX) is an online commodity
exchange based in India. It was incorporated as a private limited company incorporated on April
23, 2003 under the Companies Act, 1956. It obtained its Certificate for Commencement of
Business on May 9, 2003. It has commenced its operations on December 15, 2003. NCDEX is a
closely held private company which is promoted by national level institutions and has an
independent Board of Directors and professionals not having vested interest in commodity
markets

Commodities Traded at NCDEX:-
       Bullion
           Silver, Brent
           Gold KG

       Minerals
              Electrolytic Copper Cathode,
              Aluminum Ingot,
              Nickel
              Cathode,
              Zinc Metal Ingot,
              Mild steel Ingots

       Oil and Oil seeds:-
              Cotton seed,
              Oil cake,
              Crude Palm Oil,
              Groundnut (in shell),
     Groundnut expeller Oil,
     Cotton,
     Mentha oil,
     RBD Pamolein, RM
     seed oil cake,
     Refined soya oil,
     Rape seeds,
     Mustard seeds,
     Caster seed,
     Yellow soybean,
     Meal

 Pulses
      Urad,
      Yellow peas,
      Chana,
      Tur,
      Masoor,

 Grain
      Wheat,
      Indian Pusa Basmati Rice,
      Indian parboiled Rice (IR-36/IR-64),
      Indian raw Rice (ParmalPR-106),
      Barley,
      Yellow red maize

 Spices
      Jeera,
      Turmeric,
      Pepper

 Plantation
      Cashew,
      Coffee Arabica,
      Coffee Robusta

 Fibers and other
     Guar Gum,
     Guar seeds,
     Guar,
     Jute sacking bags,
     Indian 28
     cotton,
     Indian 31mm cotton,
     Lemon, Grain Bold,
     Medium Staple,
     Mulberry,
     Green Cottons,
     Potato,
     Raw Jute,
     Mulberry raw Silk,
     V-797 Kapas,
     Sugar,
     Chilli LCA334

 Energy
     Crude Oil,
     Furnace oil
http://en.wikipedia.org/wiki/National_Commodity_and_Derivatives_Exchange




                   National multi commodity exchange of India ltd

In response to the Press Note issued by the Government of India during May'1999, first state-of-
the-art demutualised multi-commodity Exchange, National Multi Commodity Exchange of India
Ltd. (NMCE) was promoted by commodity-relevant public institutions, viz., Central
Warehousing Corporation (CWC), National Agricultural Cooperative Marketing Federation of
India (NAFED), Gujarat Agro-Industries Corporation Limited (GAICL), Gujarat State
Agricultural Marketing Board (GSAMB), National Institute of Agricultural Marketing (NIAM),
and Neptune Overseas Limited (NOL). While various integral aspects of commodity economy,
viz., warehousing, cooperatives, private and public sector marketing of agricultural commodities,
research and training were adequately addressed in structuring the Exchange, finance was still a
vital missing link. Punjab National Bank (PNB) took equity of the Exchange to establish that
linkage. Even today, NMCE is the only Exchange in India to have such investment and technical
support from the commodity relevant institutions. These institutions are represented on the Board
of Directors of the Exchange and also on various committees set up by the Exchange to ensure
good corporate governance. Some of them have also lent their personnel to provide technical
support to the Exchange management. The day-to-day operations of the Exchange are managed
by the experienced and qualified professionals with impeccable integrity and expertise. None of
them have any trading interest. The structure of NMCE is impossible to replicate in India.
NMCE is unique in many other respects. It is a zero-debt company; following widely accepted
prudent accounting and auditing practices. It has robust delivery mechanism making it the most
suitable for the participants in the physical commodity markets. The exchange does not
compromise on its delivery provisions to attract speculative volume. Public interest rather than
commercial interest guide the functioning of the Exchange. It has also established fair and
transparent rule-based procedures and demonstrated total commitment towards eliminating any
conflicts of interest. It is the only Commodity Exchange in the world to have received ISO
9001:2000 certification from British Standard Institutions (BSI).
NMCE commenced futures trading in 24 commodities on 26th November, 2002 on a national
scale and the basket of commodities has grown substantially since then to include cash crops,
food grains, plantations, spices, oil seeds, metals & bullion among others. Research Desk of
NMCE is constantly in the process of identifying the hedging needs of the commodity economy
and the basket of products is likely to grow even further. NMCE has also made immense
contribution in raising awareness about and catalyzing implementation of policy reforms in the
commodity sector. NMCE was the first Exchange to take up the issue of differential treatment of
speculative loss. It was also the first Exchange to enroll participation of high net-worth corporate
securities brokers in commodity derivatives market. It was the Exchange, which showed a way to
introduce warehouse receipt system within existing legal and regulatory framework. It was the
first Exchange to complete the contractual groundwork for dematerialization of the warehouse
receipts. Innovation is the way of life at NMCE.
http://www.nmce.com/about_us/about_us.jsp



Derivatives

In finance derivatives is the collective name used for a broad class of financial instruments that
derive their value from other financial instruments (known as the underlying), events or
conditions.

Derivatives are usually broadly categorised by:

      The relationship between the underlying and the derivative (e.g. forward, option, swap)
      The type of underlying (e.g. equity derivatives, foreign exchange derivatives, interest rate
       derivatives or credit derivatives)
      The market in which they trade (e.g., exchange traded or over-the-counter)

Derivatives are used by investors to

      provide leverage or gearing, such that a small movement in the underlying value can
       cause a large difference in the value of the derivative
      speculate and to make a profit if the value of the underlying asset moves the way they
       expect (e.g. moves in a given direction, stays in or out of a specified range, reaches a
       certain level)
      hedge or mitigate risk in the underlying, by entering into a derivative contract whose
       value moves in the opposite direction to their underlying position and cancels part or all
       of it out
      obtain exposure to underlying where it is not possible to trade in the underlying (e.g.
       weather derivatives)
      create optionality where the value of the derivative is linked to a specific condition or
       event (e.g. the underlying reaching a specific price level)



   




Uses
Hedging

Hedging is a technique that attempts to reduce risk.

Derivatives allow risk about the price of the underlying asset to be transferred from one party to
another. For example, a wheat farmer and a miller could sign a futures contract to exchange a
specified amount of cash for a specified amount of wheat in the future. Both parties have reduced
a future risk: for the wheat farmer, the uncertainty of the price, and for the miller, the availability
of wheat. However, there is still the risk that no wheat will be available because of events
unspecified by the contract, like the weather, or that one party will renege on the contract.
Although a third party, called a clearing house, insures a futures contract, not all derivatives are
insured against counterparty risk.

From another perspective, the farmer and the miller both reduce a risk and acquire a risk when
they sign the futures contract: The farmer reduces the risk that the price of wheat will fall below
the price specified in the contract and acquires the risk that the price of wheat will rise above the
price specified in the contract (thereby losing additional income that he could have earned). The
miller, on the other hand, acquires the risk that the price of wheat will fall below the price
specified in the contract (thereby paying more in the future than he otherwise would) and reduces
the risk that the price of wheat will rise above the price specified in the contract. In this sense,
one party is the insurer (risk taker) for one type of risk, and the counterparty is the insurer (risk
taker) for another type of risk.

Hedging also occurs when an individual or institution buys an asset (like a commodity, a bond
that has coupon payments, a stock that pays dividends, and so on) and sells it using a futures
contract. The individual or institution has access to the asset for a specified amount of time, and
then can sell it in the future at a specified price according to the futures contract. Of course, this
allows the individual or institution the benefit of holding the asset while reducing the risk that the
future selling price will deviate unexpectedly from the market's current assessment of the future
value of the asset.

Derivatives serve a legitimate business purpose. For example a corporation borrows a large sum
of money at a specific interest rate.[1] The rate of interest on the loan resets every six months. The
corporation is concerned that the rate of interest may be much higher in six months. The
corporation could buy a forward rate agreement (FRA). A forward rate agreement is a contract to
pay a fixed rate of interest six months after purchases on a notional sum of money. [2] If the
interest rate after six months is above the contract rate the seller pays the difference to the
corporation, or FRA buyer. If the rate is lower the corporation would pay the difference to the
seller. The purchase of the FRA would serve to reduce the uncertainty concerning the rate
increase and stabilize earnings.

Speculation and arbitrage

Derivatives can be used to acquire risk, rather than to insure or hedge against risk. Thus, some
individuals and institutions will enter into a derivative contract to speculate on the value of the
underlying asset, betting that the party seeking insurance will be wrong about the future value of
the underlying asset. Speculators will want to be able to buy an asset in the future at a low price
according to a derivative contract when the future market price is high, or to sell an asset in the
future at a high price according to a derivative contract when the future market price is low.

Individuals and institutions may also look for arbitrage opportunities, as when the current buying
price of an asset falls below the price specified in a futures contract to sell the asset.
Speculative trading in derivatives gained a great deal of notoriety in 1995 when Nick Leeson, a
trader at Barings Bank, made poor and unauthorized investments in futures contracts. Through a
combination of poor judgment, lack of oversight by the bank's management and by regulators,
and unfortunate events like the Kobe earthquake, Leeson incurred a $1.3 billion loss that
bankrupted the centuries-old institution.[3]

Types of derivatives
OTC and exchange-traded

Broadly speaking there are two distinct groups of derivative contracts, which are distinguished
by the way they are traded in the market:

Over-the-counter (OTC) derivatives

OTC are contracts that are traded (and privately negotiated) directly between two parties, without
going through an exchange or other intermediary. Products such as swaps, forward rate
agreements, and exotic options are almost always traded in this way. The OTC derivative market
is the largest market for derivatives, and is largely unregulated with respect to disclosure of
information between the parties, since the OTC market is made up of banks and other highly
sophisticated parties, such as hedge funds. Reporting of OTC amounts are difficult because
trades can occur in private, without activity being visible on any exchange. According to the
Bank for International Settlements, the total outstanding notional amount is $684 trillion (as of
June 2008).[4] Of this total notional amount, 67% are interest rate contracts, 8% are credit default
swaps (CDS), 9% are foreign exchange contracts, 2% are commodity contracts, 1% are equity
contracts, and 12% are other. Because OTC derivatives are not traded on an exchange, there is
no central counterparty. Therefore, they are subject to counterparty risk, like an ordinary
contract, since each counterparty relies on the other to perform.

Exchange-traded derivatives

 ETD are those derivatives products that are traded via specialized derivatives exchanges or other
exchanges. A derivatives exchange acts as an intermediary to all related transactions, and takes
Initial margin from both sides of the trade to act as a guarantee. The world's largest[5] derivatives
exchanges (by number of transactions) are the Korea Exchange (which lists KOSPI Index
Futures & Options), Eurex (which lists a wide range of European products such as interest rate &
index products), and CME Group (made up of the 2007 merger of the Chicago Mercantile
Exchange and the Chicago Board of Trade and the 2008 acquisition of the New York Mercantile
Exchange). According to BIS, the combined turnover in the world's derivatives exchanges
totaled USD 344 trillion during Q4 2005. Some types of derivative instruments also may trade on
traditional exchanges. For instance, hybrid instruments such as convertible bonds and/or
convertible preferred may be listed on stock or bond exchanges. Also, warrants (or "rights") may
be listed on equity exchanges. Performance Rights, Cash xPRTs and various other instruments
that essentially consist of a complex set of options bundled into a simple package are routinely
listed on equity exchanges. Like other derivatives, these publicly traded derivatives provide
investors access to risk/reward and volatility characteristics that, while related to an underlying
commodity, nonetheless are distinctive.

Derivative contract types

There are three major classes of derivatives:


                                          DERIVATIVES




            Options                 Futures                 Swaps                 Forwards




      Put             Call                             Interest            Currency
                                                        Rate

                        Commodit            Security
                           y

Futures/Forwards

Futures/Forwards are contracts to buy or sell an asset on or before a future date at a price
specified today. A futures contract differs from a forward contract in that the futures contract is a
standardized contract written by a clearing house that operates an exchange where the contract
can be bought and sold, while a forward contract is a non-standardized contract written by the
parties themselves.




Options

Options are contracts that give the owner the right, but not the obligation, to buy (in the case of a
call option) or sell (in the case of a put option) an asset. The price at which the sale takes place is
known as the strike price, and is specified at the time the parties enter into the option. The option
contract also specifies a maturity date. In the case of a European option, the owner has the right
to require the sale to take place on (but not before) the maturity date; in the case of an American
option, the owner can require the sale to take place at any time up to the maturity date. If the
owner of the contract exercises this right, the counterparty has the obligation to carry out the
transaction.

Swaps
Swaps are contracts to exchange cash (flows) on or before a specified future date based on the
underlying value of currencies/exchange rates, bonds/interest rates, commodities, stocks or other
assets.

More complex derivatives can be created by combining the elements of these basic types. For
example, the holder of a swaption has the right, but not the obligation, to enter into a swap on or
before a specified future date.

                      http://en.wikipedia.org/wiki/Derivative _(finance)
 RESEACH TOPIC :
“COMMODITY MARKET TREND IN INDIA’’

 PROBLEM STATEMENT:
  To study Commodity Market Trend in India .


 OBJECTIVES OF THE STUDY:
   PRIMARY OBJECTIVE:
          To know the trends of the commodity market in India with of some specific
           commodities.
   SECONDARY OBJECTIVES:
          To know the seasonal impact on gold.
          To know the seasonal impact on silver.
          To know the seasonal impact on crude oil.
          To know the seasonal impact on copper.


 LITERATURE REVIEW OF STUDY
    The biennial publication Commodity Market Review (CMR) analyses                   important
    agricultural commodity market developments likely to have       significant implications for
    FAO member countries, both developed and developing. This issue of the Review is
    devoted to exploring in depth a variety of issues related to global agricultural commodity
    value chains. Value chains have become more complex as production and processing
    activities turn out to be increasingly fragmented. Moreover, concentration and the
    prospective of market power, as well as the emergent scope of food standards add to this
    complexity. This issue includes articles that focus on both cross-commodity issues, such
    as strategic trade, foreign direct investment and the effectiveness of technical regulation,
    as well as on characteristics of individual commodity value chains, such as coffee, cocoa
    and frozen concentrated orange juice, which are of particular interest in terms of
    industrial organization
 RESEACH DESIGN:
   Descriptive study will take place for this research topic, as the Row data are used in my
   study. Research design is the plan and structure of investigation so as to obtain the answer to
   research questions.
   I have used descriptive research design. As my project will describe the situation of the
   return on the different commodities, the raw data of the spot prices of the commodities are
   used.


 DATA SOURCE:
   Secondary data has been used in this research. It is mainly collected from the mcxindia.com
   website and from ncdex.com website and mcx literature.


 ANALYSIS TOOLS AND TECHNICS:
The following methods will be used in this research work.
      Time series analysis.
      Secular trend method.
      Seasonal variation method.
    3 monthly Moving average.


 SCOPE OF THE STUDY:
   Commodity market is the most emerging and potential market in India. Day by day many
   new commodities are added for trading in commodity market. Commodity markets
   provide an avenue for their sale. From knowing the trend of the commodity market,
   future prediction about return can be determined and by study of the seasonal
   impact, general time period for investment and withdrawal of it can also be
   determined. The scopes the e of the study was restricted to the objectives stated earlier.


 LIMITATIONS OF THE STUDY:
 The various sources utilized for the study, which include, websites, information from
   commodity trackers; Market watchers are subject to personal biases.
 Historical price data of several commodities is not available on the various exchanges and
   not even at FMC source.
 It does not become possible for me to take all commodities for the research, due to some
   constrains. So, I have to take some specific commodities for this research.
 The limitations of the various methods of the time series analysis, is the main limitation of
   this research.
GOLD TREND
Gold is a unique asset based on few basic characteristics. It is primarily a monetary asset, and
partly a commodity. It is an internationally recognized asset that is not dependent upon any
government‟s promise to pay.


INDIAN GOLD MARKET:
Gold is valued in India as a savings and investment vehicle and is the             second preferred
investment after bank deposits. India is the world's largest consumer of gold in jewellery as
investment. In July 1997 the RBI authorized the commercial banks to import gold for sale or
loan to jewelers and exporters. At present, 13 banks are active in the import of gold. This
reduced the disparity between international and domestic prices of gold from 57 percent during
1986 to 1991 to 8.5 percent in 2001. Domestic consumption is dictated by monsoon, harvest and
marriage season. Indian jewellery off take is sensitive to price increases and even more so to
volatility. In the cities gold is facing competition from the stock market and a wide range of
consumer goods. Facilities for refining, assaying, making them into standard bars in India, as
compared to the rest of the world, are insignificant, both qualitatively and quantitatively.


MARKET MOVING FACTORS:
     Above ground supply from sales by central banks, reclaimed scrap                   and official
        gold loans.
     Producer / miner hedging interest.
     World macro-economic factors - US Dollar, Interest rate.
     Comparative returns on stock markets.

Domestic demand based on monsoon and agricultural output
Table of gold trend

Date         return %      trend %      short term
                                        variable
2008 jan        10.3497
2008 feb         5.9487    -0.4806876        6.429387607
2008 march      -4.0257    4.80074444       -8.826444444
2008 apr        -4.2929    -3.4651389       -0.827761111
2008 may         7.0181    0.09233333        6.925766667
2008 jun         6.4204    -1.2029383        7.623338272
2008 jul        -2.0341    6.16480988       -8.198909877
2008 aug        -5.6701    -5.4368049       -0.233295062
2008 sep        10.8571    0.05234359        10.80475641
2008 oct       -12.8904    3.32190171       -16.21230171
2008 nov        12.4582    -4.6286752        17.08687521
2008 dec         4.3165    0.52433761        3.792162393
2009 jan        5.49975    -2.4813355         7.98108547
2009 feb         7.8914    3.45497863        4.436421368
2009 march      -2.5314    3.96573718       -6.497137179
2008 apr        -4.0489    -3.2346325       -0.814267521
2009 may         4.4857    0.31907265         4.16662735
2009 jun        -2.9156    -0.1639107       -2.751689269
2009 jul         2.4076    -0.4882965        2.895896486
2009 aug         2.1752    -1.8399312        4.015131244
2009 sep         3.9796    2.11254872        1.867051282
2009 oct         1.6304    -3.3734722        5.003872222
2009 nov        10.1908    3.53803333        6.652766667
2009 dec          -5.558
Chart of gold trend :


                                                                                                               gold trend
              20
              15
              10
               5
   Return %




               0


                                                                                                                                     2008 nov




                                                                                                                                                                                                                                                                           2009 nov
                                                                                         2008 jul
                                                       2008 apr




                                                                                                                          2008 oct




                                                                                                                                                                                              2008 apr




                                                                                                                                                                                                                                                                2009 oct
                                                                              2008 jun




                                                                                                               2008 sep




                                                                                                                                                2008 dec
                                                                                                                                                           2009 jan




                                                                                                                                                                                                                                                                                      2009 dec
                    2008 jan
                               2008 feb




                                                                  2008 may




               -5




                                                                                                                                                                                                                               2009 jul
                                                                                                                                                                                                                                          2009 aug
                                                                                                    2008 aug




                                                                                                                                                                                                                                                     2009 sep
                                                                                                                                                                                 2009 march



                                                                                                                                                                                                                    2009 jun
                                                                                                                                                                                                         2009 may
                                          2008 march




                                                                                                                                                                      2009 feb
              -10
              -15
              -20
                                                                                                                                                Month

                                                                             return %                                     trend %                                     short term variable




INTERPRITATION:
The chart of the trend analysis shows the overall trend of the returns, yield on the gold during a
span of two years. From the chart it is clear that in most of the time the trend of the gold gives
positive returns. And this trend does not moves parallel. It is also seen in the chart that the return
remains high between 2008 January , September , November and 2009 November                                                                                                                                                                                                 And the
return remains low during 2008 October. Short term variation trend indicates that in few cases, it
is found that the short term variation is higher, otherwise it remains comparatively minor. Thus
ultimately the overall position of the trend of the gold‟s return is satisfactory.


SEASONAL VARIANCE
It is worth noting to know the seasonal variations for any commodity so that it can be possible to
take the benefits of trading for the time period, which can give the maximum return. Seasonal
variation analysis also helps to divide the total yield return according to their proportion to the
monthly basis so that it become possible to know about the time period which gives the
maximum as well as minimum return.
Table of gold seasonal index

month          return %               2 yearly       seasonal index
                                      avr
                    2008       2009
JANUARY          10.3497   5.49975      7.924725          23.774175
FERUARY           5.9487    7.8914       6.92005           20.76015
MARCH            -4.0257   -2.5314      -3.27855           -9.83565
APRIL            -4.2929   -4.0489        -4.1709          -12.5127
MAY               7.0181    4.4857         5.7519           17.2557
JUNE              6.4204   -2.9156         1.7524             5.2572
JULY             -2.0341    2.4076       0.18675            0.56025
AUGUST           -5.6701    2.1752      -1.74745           -5.24235
SEPETEMBER       10.8571    3.9796       7.41835           22.25505
OCTOMBER        -12.8904    1.6304           -5.63            -16.89
NOVEMBER         12.4582   10.1908       11.3245            33.9735
DECEMBER          4.3165     -5.558     -0.62075           -1.86225



Chart of gold seasonal index :
INTERPRITATION:
The above chart shows the general tendency of the returns, which can be yield from the gold for
a specific period of time during the year. They also show that it is wisely to invest for the traders
and investors in gold for 2008 October to 2009 February & 2009 July to 2009 November, as the
returns during them remains high and it is also clear that the return between 2008 July to 2008
October & 2009 March to June remains not high. Thus, it is not beneficial for the investor to
invest during this period. The chart also indicates that the maximum return can be earned in the
January and November. The festival of DIWALI generally occurs during the October-November,
and it is very much clear that during these months, returns on gold remains comparatively high.
Thus, we can say that such kinds of festivals make an impact on the gold. The seasonal index
continuously falls towards downward after February to April . Indian budget declared on the last
day of February. Thus the events like budget may also make an impact on it.




SILVER TREND
INTRODUCTION:
Silver's unique properties make it a very useful 'Industrial Commodity', despite it being classed
as a precious metal. The price of silver is not only a function of its primary output but more a
function of the price of other metals also, as world mine production is more a function of the
prices of other metals. The tie between silver and economic activity is strong, given that around
two-thirds of total silver fabrication is in the industrial and photographic sectors.
INDIAN SCENARIO:
Silver imports into India for domestic consumption in 2002 was 3,400 tons down 25 % from
record 4,540 tons in 2001. Open General License (OGL) imports are the only significant source
of supply to the Indian market. Non-duty paid silver for the export sector rose sharply in 2002,
up by close to 200% year-on-year to 150 tons. Around 50% of India's silver requirements last
year were met through imports of Chinese silver and other important sources of supply being
UK, CIS, Australia and Dubai. Indian industrial demand in 2002 is estimated at 1375 tons down
by 13 % from 1,579 tons in 2001. In spite of this fall, India is still one of the largest users of
silver in the world, ranking alongside Industrial giants like Japan and the United States. In India
silver price volatility is also an important determinant of silver demand as it is for gold.




Table of gold trend

   YEARS          return %     TREND      SHORT
                              IN %        TERM
                                          VARIABLE
  2008 JAN          11.1931
  2008 FEB          14.2784 -2.37399         16.65239
2008 MARCH          -9.0181 14.26395         -23.2821
 2008 APRIL         -1.5709 -7.22132         5.650424
 2008 MAY        4.9663    -0.54403   5.510333
 2008 JUNE       4.3665    -3.22525   7.591754
 2008 JULY          2.82   17.98071   -15.1607
 2008 AUG      -17.2523    -6.50686   -10.7454
  2008 SEP       -2.714    -0.89709   -1.81691
 2008 OCT      -16.4031    -1.43646   -14.9666
 2008 NOV       -0.7042    -5.75259   5.048385
 2008 DEC        9.3275    -3.18659   12.51409
  2009 JAN       7.6752    -4.99734   12.67254
  2009 FEB       10.202    7.808141   2.393859
 2009 MAR       -1.0414    6.359936   -7.40134
 2009 APR       -2.2064    -10.1504   7.944018
 2009 MAY       18.2204    4.045932   14.17447
 2009 JUNE      -10.083    5.510088   -15.5931
 2009JULY        2.9225    -8.29569   11.21819
 2009 AUG        6.0405    -5.94815   11.98865
  2009 SEP      11.3324    8.967503   2.364897
 2009 OCT       -1.9583    17.59395   -19.5522
  2009NOV        7.8094    -34.8152    42.6246
 2009 DEC       -5.4929




Chart of silver trend
                                                  silver trend
                50

                40

                30

                20
     Return %




                10

                 0

                          2008 AUG

                           2008 OCT




                           2009 OCT
                           2009NOV
                          2009 AUG
                          2008 MAY




                          2009 MAY
                           2008 FEB




                           2008 SEP



                           2008 DEC

                           2009 FEB




                           2009 SEP



                           2009 DEC
                          2008 NOV




                          2009 MAR




                           2009JULY
                           2009 APR
                         2008 APRIL



                          2008 JULY




                           2009 JAN
                         2008 JUNE




                         2009 JUNE
                          2008 JAN

                       2008 MARCH




                -10

                -20

                -30

                -40

                                                         month

                                 return %          TREND IN %           SHORT TERM VARIABLE



INTERPRITATION:
The chart and table, shows the overall trend of the returns, yield on the silver during a span of
two years. It is also seen in the chart that the return remains high between 2008 January,
February, 2009 February, May, September and the return remains low during 2008 March ,April
,2009 January. Short-term variation trend indicates that Short-term variation in Silver remains
higher in the normal cases and the trend does not follow a regular pattern also, so that it is wisely
not to do investment decision for the silver on the basis of its trend analysis.


Seasonal variable

Table of silver seasonal index
month                 return %                     2 yearly     seasonal index
                                                   avr
                           2008            2009
JANUARY                 11.1931          7.6752     9.43415            28.30245
FERUARY                 14.2784          10.202     12.2402             36.7206
MARCH                   -9.0181         -1.0414    -5.02975           -15.08925
APRIL           -1.5709     -2.2064   -1.88865          -5.66595
MAY              4.9663     18.2204   11.59335          34.78005
JUNE             4.3665     -10.083   -2.85825          -8.57475
JULY                2.82     2.9225    2.87125           8.61375
AUGUST         -17.2523      6.0405    -5.6059          -16.8177
SEPETEMBER       -2.714     11.3324     4.3092           12.9276
OCTOMBER       -16.4031     -1.9583    -9.1807          -27.5421
NOVEMBER        -0.7042      7.8094     3.5526           10.6578
DECEMBER         9.3275     -5.4929     1.9173            5.7519



Chart of silver seasonal index




INTERPRITATION:
From the table it is very much clear, the general tendency of the returns, which can be yield from
the silver for a specific period of time during the year. They also show that it is wisely to invest
in the silver for the months during November to February, as the returns remains good between
these months and the return remains low between March to October, so, it is not beneficial for
the investor to invest during this period. It is also clear that November and January are the two
months, which yields the maximum returns. The impact of the „DIWALI‟ is also seen here.
COPPER TREND
Introduction :
Copper ranks third in world metal consumption after steel and aluminum. It is a product whose
fortunes directly reflect the state of the world's economy.
INDIAN SCENARIO:
The size of Indian Copper Industry is around 4 lakh tons, which as percentage of world copper
market is 3 %. Birla Copper, Sterilite Industries are two major private producers and Hindustan
Copper Ltd the public sector producers. India is emerging as net exporter of copper from the
status of net importer on account of rise in production by three companies. Copper goes into
various usages such as Building, Cabling for power and telecommunications, Automobiles etc.
Two major states owned telecommunications service providers; BSNL and MTNL consume 10%
of country's copper production. Growth in the building construction and automobile sector would
keep demand of copper high.
FACTORS INFLUANCES COPPER MARKET:
 World copper mine production through exploration of new mine and expansion of existing
   mine. Economic growth of the major consuming countries such as China, Japan, Germany
   etc. Growth & development in the Building, electronics and electrical industry.


Table of copper trend
    YEARS        RETURN       TREND           SHORT TERM
                    %                          VARIABLE
2008 JAN          7.9902
2008 FEB          18.3039     3.389585           14.91431
2008 MARCH         2.5379     5.457291           -2.91939
2008 APRIL         4.0422     1.119931           2.922269
2008 MAY          -2.2496     0.172488           -2.42209
2008 JUNE          8.9745     -0.75395           9.728451
2008 JULY         -6.0825     11.00993           -17.0924
2008 AUG          -4.5792     -6.71737           2.138173
2008 SEP          -7.7111     23.38746           -31.0986
2008 OCT          -31.8121    -9.23616           -22.5759
2008 NOV          -8.6745     -6.87254           -1.80196
2008 DEC          -19.2012    -11.5323           -7.66888
2009 JAN           1.7096     0.397382           1.312218
2009 FEB          10.8245     -8.88964           19.71414
2009 MAR          19.3659     -0.11213           19.47803
2009 APR           7.7723     10.14097           -2.36867
2009 MAY           0.4383     -5.20341           5.641706
2009 JUNE          3.6763     0.668744           3.007556
2009JULY          12.2258     -10.2458           22.47157
2009 AUG           9.5384     13.74538           -4.20698
2009 SEP          -3.5389     2.533077           -6.07198
2009 OCT           3.4083      -6.1726           9.580896
2009NOV            4.4851     1.684128           2.800972
2009 DEC           6.0746
Chart of copper seasonal index


                                    Copper trend
               30

               20

               10
    Return %




                0
                         2008 OCT
                        2008 AUG




                        2009 AUG

                         2009 OCT
                        2008 MAY




                        2009 MAY




                         2009NOV
                         2008 FEB




                         2008 DEC




                         2009JULY
                         2008 SEP




                         2009 FEB
                        2008 NOV




                         2009 SEP
                        2009 MAR
                        2008 JULY




                         2009 APR
                       2008 APRIL




                         2009 JAN
                       2008 JUNE




                       2009 JUNE
                        2008 JAN

                     2008 MARCH




               -10

               -20

               -30

               -40
                                          month
                      RETURN %         TREND         SHORT TERM VARIABLE

INTERPRITATION:
The chart shows the overall trend of the returns, yield on the copper during a span of two years.
It is also seen in the chart that the return remains high between 2008 February, 2009 February,
March, July , August. and the return remains low during 2008 October , December . The trend of
the copper is not seemed to be paralleled moving. Short-term variation trend indicates that Short-
term variation in crude oil remains high in few cases, otherwise it remains comparatively minor.
it is also clear that the overall trend for the return for the copper remains satisfactory with regards
to its comparatively low investments.
Table of copper seasonal index

                     RETURN IN                       2 YEARLY          SEASONAL
MONTH                %                               AVERAGE           INDEX
                            2008              2009
JANUARY                   7.9902            1.7096           4.8499           14.5497
FERUARY                  18.3039           10.8245          14.5642           43.6926
MARCH                     2.5379           19.3659          10.9519           32.8557
APRIL                   4.0422       7.7723        5.90725    17.72175
MAY                    -2.2496       0.4383       -0.90565    -2.71695
JUNE                    8.9745       3.6763         6.3254     18.9762
JULY                   -6.0825      12.2258        3.07165     9.21495
AUGUST                 -4.5792       9.5384         2.4796      7.4388
SEPETEMBER             -7.7111      -3.5389          -5.625    -16.875
OCTOMBER              -31.8121       3.4083       -14.2019    -42.6057
NOVEMBER               -8.6745       4.4851        -2.0947     -6.2841
DECEMBER              -19.2012       6.0746        -6.5633    -19.6899




Chart of copper seasonal index



                50
                            copper trend
                40
                30
                20
                10
     Return %




                 0
                -10
                -20
                -30
                -40
                -50
                                    month
                                 seasonal index
INTERPRITATION:
From the table is very much clear, the general tendency of the returns, which can be yield from
the copper for a specific period of time during the year. They also show that it is wisely to invest
in copper for January to August, as the returns between them remains good and it is also clear
that the return between September to December remains lower so, it is not beneficial for the
investor to invest during this period. it is also clear that the price of the copper is comparatively
lower then other precious metals and the return yield on it is also not bad. Thus small investors
can also take advantage of the trading in the copper, especially in during January to June.




CRUDE OIL TREND
Crude oil is a mixture of hydrocarbons that exists in a liquid phase in natural underground
reservoirs. Oil and gas account for about 60 per cent of the total world's primary energy
consumption. Almost all industries including agriculture are dependent on oil in one way or
other. Oil & lubricants, transportation, petrochemicals, pesticides and insecticides, paints,
perfumes, etc. are largely and directly affected by the oil prices. The prices of crude are highly
volatile. High oil prices lead to inflation that in turn increases input costs; reduces non-oil
demand and lower investment in net oil importing countries.
INDIAN SCENARIO
India ranks among the top 10 largest oil-consuming countries. Oil accounts for about 30 per cent
of India's total energy consumption. The country's total oil consumption is about 2.2 million
barrels per day. India imports about 70 per cent of its total oil consumption and it makes no
exports. India faces a large supply deficit, as domestic oil production is unlikely to keep pace
with demand. India's rough production was only 0.8 million barrels per day. The oil reserves of
the country (about 5.4 billion barrels) are located primarily in Mumbai High, Upper Assam,
Cambay,Krishna-Godavari and Cauvery basins. Balance recoverable reserve was about 733
million tones (in 2003) of which offshore was 394 million tones and on shore was 339 million
tones. India had a total of 2.1 million barrels per day in refining capacity. Government has
permitted foreign participation in oil exploration, an activity restricted earlier to state owned
entities. Indian government in 2002 officially ended the Administered Pricing Mechanism
(APM). Now crude price is having a high correlation with the international market price. As on
date, even the prices of crude bi-products are allowed to vary +/- 10% keeping in line with
international crude price, subject to certain government laid down norms/ formulae.
Disinvestment/restructuring of public sector units and complete deregulation of Indian retail
petroleum products sector is under way.
MARKET INFLUANCING PRICE:
   OPEC output and supply.
   Terrorism, Weather/storms, War and any other unforeseen geopolitical factors that
       causes supply disruptions.
     Global demand particularly from emerging nations.
     Dollar fluctuations.
     Refinery fires & funds buying.

TABLE OF CRUDE OIL TREND
Date                retunn %           TREND IN %        short term
                                                         variable
2008 JAN                    -5.4878
20008 FEB                   12.8391       -1.068950427     13.90805043
2008 MARCH                   0.2463        0.745116239    -0.498816239
2008 APR                     11.665       -2.154188034     13.81918803
2008 MAY                    19.4019        1.076716239     18.32518376
2008 JUN                    13.4802        1.761866667     11.71833333
2008 JULY                  -12.5226        2.423822222    -14.94642222
2008 AUG                    -3.0652       -1.375536752    -1.689663248
2008 SEP                    -7.6863        2.128046154    -9.814346154
2008 OCT                   -36.7398       -0.143643162    -36.59615684
2008 NOV                   -14.8527       -0.574893162    -14.27780684
2008 DEC                       -27.1      -2.711463675    -24.38853632
2009 JAN                    20.2481        0.058824786     20.18927521
2009 FEB                    -1.4894       -0.662264957    -0.827135043
2009 MARCH                   4.7277        0.380544872     4.347155128
2009 APR                    10.2615       -0.667286325     10.92878632
2009 MAY                     7.0796       -0.254690171     7.334290171
2009 JUN                     5.1067        2.238917379     2.867782621
2009 JULY                   -4.5799       -2.042880912    -2.537019088
2009 AUG           9.1491    1.380676353    7.768423647
2009 SEP           -3.691   -0.604789744   -3.086210256
2009 OCT           8.0317    0.206794872    7.824905128
2009 NOV          -5.6102    0.767051282   -6.377251282
2009 DEC           4.3977




CHART OF CRUDE OIL TREND
                                    CRUDE OIL TREND
              30

              20

              10

               0
   RETURN %




                        2008 SEP



                       2008 DEC

                        2009 FEB




                        2009 SEP



                       2009 DEC
                      20008 FEB




                      2008 NOV




                      2009 NOV
                       2008 APR




                       2008 OCT




                       2009 APR
                      2008 MAY

                       2008 JULY




                    2009 MARCH




                       2009 JULY
                       2009 AUG

                       2009 OCT
                        2008 JAN




                       2008 AUG




                        2009 JAN
                    2008 MARCH




                      2009 MAY
                       2008 JUN




                       2009 JUN
              -10

              -20

              -30

              -40
                                                MONTH

                             retunn %   TREND IN %       short term variable



INTERPRITATION:
The chart shows the overall trend of the returns, yield on the crude oil during a span of two
years. From the chart it is clear that in most of the time the trend of the crude oil gives positive
returns. It is also seen in the chart that the returns remains high between 2008 February , April ,
May , June , 2009 January , April and the return remains low during2008 July , October ,
November , December.The trend of crude oil is seemed moving parallel .Chart also indicates that
from the 2009 March to up till now the return yield on crude oil rises continuously. Short-term
variation trend indicates that Short-term variation in crude oil remains high.




SEASONAL INDEX

SEASONAL INDEX OF CRUDE OIL

month               return                 2 years      2 yearly      seasonal
                                                        avr           index
                              2008       2009
JANUARY                    -5.4878    20.2481     14.7603          7.38015     22.14045
FERUARY                    12.8391    -1.4894     11.3497          5.67485     17.02455
MARCH                       0.2463     4.7277       4.974             2.487        7.461
APRIL                       11.665    10.2615     21.9265         10.96325     32.88975
MAY                        19.4019     7.0796     26.4815         13.24075     39.72225
JUNE                       13.4802     5.1067     18.5869          9.29345     27.88035
JULY                      -12.5226    -4.5799    -17.1025         -8.55125    -25.65375
AUGUST                     -3.0652     9.1491      6.0839          3.04195      9.12585
SEPETEMBER                 -7.6863     -3.691    -11.3773         -5.68865    -17.06595
OCTOMBER                  -36.7398     8.0317    -28.7081        -14.35405    -43.06215
NOVEMBER                  -14.8527    -5.6102    -20.4629        -10.23145    -30.69435
DECEMBER                      -27.1    4.3977    -22.7023        -11.35115    -34.05345


CHART OF CRUDE OIL SEASONAL INDEX


                             CRUDE OIL SEASONAL INDEX
                    60

                    40

                    20
         RETURN %




                     0

                    -20

                    -40

                    -60
                                                            MONTH
                                                seasonal index




INTERPRITATION:
From above chart it is very much clear, the general tendency of the returns, which can be yield
from the crude oil for a specific period of time during the year. They also show that it is wisely
to invest in crude oil for January to August, as the returns between them remains high and the
return between September to December is low so, it is not beneficial for the investor to invest
during this period. but in the case of crude oil, it shows minimum returns during these of two
years .

				
DOCUMENT INFO
Shared By:
Categories:
Stats:
views:355
posted:3/22/2011
language:English
pages:51