The interest rates in the US influence the price of commodities sold all over the world. If the interest
rates rise in US, the dollar get stronger and thus the prices and the purchase power increases. The
same would apply in the reverse scenario. Commodity contracts are traded in the commodity
exchange, thus making it very useful for the traders to get a fair price. Apart from this, the Multi-
Commodity exchange also facilitates trade of Derivative Investments like: Cash financial investment,
Futures (Perceived value in the future) and Options. To be eligible for classification as future contract,
all commodities need to qualify the following criteria:
Ø It is for the future price speculation
Ø Margin money which is a minimum of 5 % of the total amount
Ø Expiry date and time which is settled by delivery.
The expert session also discussed on how a trader can overcome factors affecting commodity prices-
one of the methods include hedging wherein you neither lose nor gain money and the price remains
stable. It is a risk mitigation method. Students interacted with the expert on common queries related to
the understanding of futures and options. Overall, the management as well as liberal arts students
found the session very useful and practical.
In picture: (Top) Group photograph of participants with the expert Mr. Shrikant Koundinya-Vice President,
MCX and faculties (Bottom) Mr. Koundinya explaining the students about volume of derivative trading and
types of derivatives in India
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