Posts Tagged ‘price’

Seasonal Index……“Time is Money” Part 1

Hello Friends here we come up with our another write up on “SMC Gyan Series”


Seasonal Index……. “Time is Money”

In this Blog, we are going to read more about the old saying  “Time is Money” which is represented quite aptly by SEASONAL INDEX.


Seasonal Index……. “Time is Money”

The old T saying “Time is Money” is rightly represented by Seasonal Index.

To maximize profit, investors should have good knowledge of markets where demand & supply of commodities have their own seasonality & the future prices of agri contracts with volatile market psychology, triggering stop-loss orders, hitting targets & speculator closing out of positions.


What is a Seasonal Pattern?

Seasonal Indices are the virtual mirror image & identifiable seasonal movement on commodity data between two dates of the recent past, influenced by general price trend, sentiment, exchange rates etc.

It provides a better way of understanding the repetitive and predictable movement, but one should not be swayed by preconceived ideas about them, as they do not determine the actual signals, but the time of execution instead.


Reasons for studying seasonal variation :

The reasons for studying seasonal variation are:

· To learn how seasonal forces can affect the commodity market.

· Better understanding of the price movement within a time series.

· To learn how seasonal’s can be used to identify the trade timing of a market.

· Prediction of the future trends & magnitude of price changes.



Stay Tuned for more on this.

In next blog, we would touch upon the points related to

the analysis of the seasonal pattern of the commodity prices,

how an annual average method can be used to generate a seasonal pattern in predicting the future prices of the commodity,

and seasonal pattern in the year 2009.


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IMCX-India’s Fourth National Commodity Bourse, To Be Launched Soon:)


International Multi Commodity Exchange (IMCX)

Commodity trading in India has a long history & was started much before it started in many other countries.

Today, apart from numerous regional exchanges, India has three national commodity exchanges namely, Multi Commodity Exchange (MCX), National Commodity and Derivatives Exchange (NCDEX) and National Multi-Commodity Exchange (NMCE).



These commodity exchanges have been performing extremely well in these years.

The turnover of commodity exchanges in India surged by 31% in the April-August period, led by a surge in trading of farm goods.

Total value of trading at the Commodity Exchanges during the fortnight from 16th August 2009 to 31st August 2009 was Rs. 3,04,651.88 crore.



In India, futures’ trading in commodities is zooming.

India’s commodity exchanges have witnessed major action this year and are getting into investing and managing new commodity bourses.

Another commodity exchange may help using the opportunities better ; thereby improving trading volumes of specific contracts & be more efficient is the price discovery, which in turn will attract a wider constituency of participants from the entire commodity value chain i.e. government, producers, marketers, importers, exporters etc.



A new commodity exchange, International Multi Commodity Exchange is going to launch very soon under the market regulator Forward Markets Commission (FMC).

IMCX is promoted by Indiabulls Financial Services Ltd (IBFSL) and India’s biggest state-run trading firm, MMTC Ltd, and part-owned by more institutions.


The exchange is planning to start operations next month as the country’s fourth national commodity bourse & is ready to grab its share of a futures market that is growing 30% a year.



The US-based exchange services provider Millennium Information Technology (MIT) has been awarded the contract for implementing the technology platform for the aforesaid exchange.

The US-headquartered MIT provides application solutions to financial and telecom industries.



IMCX will be the first commodity bourse in India to comply with the criteria of revised ownership criteria that makes the participation compulsory of public sector units or cooperatives.


Currently, Indiabulls Financial Services Ltd. (IBFSL) holds 40% of the exchange, state-run MMTC Ltd. holds 26%.

Forward Markets Commission rejected the United Stock Exchange of India’s (USE’s) 10% stake buy in the bourse, on the grounds that the stock exchange is yet to be fully recognized.

So far, Indiabulls has diluted 24 per cent to HDFC Bank, Yes Bank and Indian Potash Ltd & IDFC + Krishak Bharati Cooperative Limited (KRIBHCO) have purchased a stake of 5% each in Indian Commodity Exchange, which was to be sold to the USE earlier.



The exchange will start operations by launching 10-12 contracts in bullion, metals, energy and agricultural commodities with some uniqueness in contracts to attract more volume.


·The exchange will launch gold mini and gold 1 kilogram contracts in the bullion segment. The gold contracts will have multiple delivery centers in five-six cities.

· In base metals, it is planning to offer copper, zinc and lead or nickel futures, and in the energy segment it will launch crude oil and natural gas contracts. Delivery-based contracts will be launched in the base metal segment, where contracts are mostly non-deliverable at other exchanges.

·The exchange has also tied up with several logistic providers for warehouse facilities, & in the next phase of expansion, the exchange may create its own warehouses

·Guar seed, rapeseed, refined soyoil, soybean and turmeric will be among the agricultural contracts.