Agricultural Commodity Future Trading and its Implications – An overview

Author(s) : Neeti Agarwal, Gurbandini Kaur
ISSN : 0974 - 497
Year : May 2013 | Volume : 7 | Issue : 2/4

Abstract: Derivatives are becoming increasingly important in world market as a tool for risk management, price discovery, speculations and for efficient trading in market. These instruments can be used by traders to offset financial risks. They also provide a mechanism by which diverse and scattered opinions of future are collected which helps in revealing information about future cash market price through future market. This in turn helps in improving the market efficiency.

The paper focuses on the conceptual perspective of commodity future trading and its implication on the commodity market. A thorough review of the literature has been done for future trading in general and commodity market in particular. The objectives of the paper are to study the growth of the commodity market in India and study the price volatility, efficiency and arbitrage opportunity of agricultural future commodity market. The study has been carried out using the secondary data. The study has resulted in finding out the gaps, which define the further scope of the research. The study shows that there is much scope in the Indian market as much has not been done in the country with respect to the agricultural commodity market.


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