IDEAS home Printed from https://ideas.repec.org/a/aii/ijcmss/v1y2010i1p30-42.html
   My bibliography  Save this article

A Buoyancy in the Commodity Trading – A Road Map

Author

Listed:
  • S. KALAISELVI

    (Lecturer and Head, P G Department of Commerce with Computer Applications, Vellalar College for Women, Erode, India)

Abstract

Commodity trading is nothing but trading in commodity derivatives (futures or options). Commodity derivatives are traded at the commodity exchanges. There are currently 2 major commodity exchanges NCDEX (National Commodity and Derivative Exchange) and MCX (Multi-Commodity Exchange). Gold, Silver, Agri-commodities including grains, pulses, spices, oils and oilseeds, mentha oil, metals and crude are some of the commodities that the exchanges deal in. Trading in commodities futures is quite similar to equity futures trading. Commodity market is a promising avenue for investments offering huge opportunities and enabling diversification of portfolio. Commodity trading is a kind of financial trading in which primary products, such as food, metals and energy, are bought and sold. Trading in commodities is mostly undertaken on contracts that are based on such commodities. Commodities trading is also called futures trading. India, among the top five producers of most of the agricultural commodities and a leading consumer of bullion and energy products, would immensely benefit from a robust commodity futures market. While the commodity derivatives markets have been in existence in the country for a while now, the gradual withdrawal of prohibition on futures trading since 2003 has paved way for the development of new exchanges and adoption of modern technologies and international practices. The agricultural commodities dominated the futures trading market in the initial years, bullion and metals have overtaken in terms of volumes post 2006-07. Future may bring to focus energy and electricity-sector-oriented products. The efficacy of the futures markets to deliver benefits to the economy can be enhanced through a strong regulatory framework, wide-spread dissemination of futures and spot prices all over the country and education, training and awareness programmes for the various stakeholders, particularly the farmers. Limited direct participation by farmers in the future markets has resulted in the potential benefits being restricted to traders, large corporates and speculators. Attention would need to be given to complex contract designs, lack of access to price information, restricted credit access, etc. that have limited farmers’ participation. This paper gives a birds eye view on the commodity trading in the global scenario.

Suggested Citation

  • S. Kalaiselvi, 2010. "A Buoyancy in the Commodity Trading – A Road Map," Indian Journal of Commerce and Management Studies, Educational Research Multimedia & Publications,India, vol. 1(1), pages 30-42, November.
    • Handle: RePEc:aii:ijcmss:v:1:y:2010:i:1:p:30-42
    as

    Download full text from publisher

    File URL: http://scholarshub.net/index.php/ijcms/article/view/310/302
    Download Restriction: no
    File URL: http://scholarshub.net/index.php/ijcms/article/view/310
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Badi Baltagi & Dong Li & Qi Li, 2006. "Transaction tax and stock market behavior: evidence from an emerging market," Empirical Economics, Springer, vol. 31(2), pages 393-408, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yok-Yong Lee & M. H. Yahya & A. M. Bany-Ariffin & S. Aslam, 2018. "Leverage Effect and Switching of Market Efficiency Post Goods and Services Tax (GST) Imposition," International Business Research, Canadian Center of Science and Education, vol. 11(3), pages 162-178, March.
    2. Thomas Hemmelgarn & Gaetan Nicodeme, 2010. "The 2008 Financial Crisis and Taxation Policy," Taxation Papers 20, Directorate General Taxation and Customs Union, European Commission.
    3. Gaffeo, Edoardo & Molinari, Massimo, 2017. "Taxing financial transactions in fundamentally heterogeneous markets," Economic Modelling, Elsevier, vol. 64(C), pages 322-333.
    4. Lillo, Felipe & Valdés, Rodrigo, 2016. "Dynamics of financial markets and transaction costs: A graph-based study," Research in International Business and Finance, Elsevier, vol. 38(C), pages 455-465.
    5. Rudolf Alvise Lennkh & Florian Walch, 2015. "Collateral Damage? Micro-Simulation of Transaction Cost Shocks on the Value of Central Bank Collateral," Working Papers 6, European Stability Mechanism.
    6. Iryna Veryzhenko & Lise Arena & Etienne Harb & Nathalie Oriol, 2017. "Time to Slow Down for High‐Frequency Trading? Lessons from Artificial Markets," Intelligent Systems in Accounting, Finance and Management, John Wiley & Sons, Ltd., vol. 24(2-3), pages 73-79, April.
    7. Zsolt Darvas & Jakob Weizsäcker, 2011. "Financial transaction tax: Small is beautiful," Society and Economy, Akadémiai Kiadó, Hungary, vol. 33(3), pages 449-473, December.
    8. Atanas Pekanov & Margit Schratzenstaller-Altzinger, 2019. "A Global Financial Transaction Tax. Theory, Practice and Potential Revenues," WIFO Working Papers 582, WIFO.
    9. Sanjay Sehgal & Tarunika Jain Agrawal, 2019. "Impact of Commodity Transaction Tax on Market Liquidity, Volatility, and Government Revenues: An Empirical Study for India," Vikalpa: The Journal for Decision Makers, , vol. 44(1), pages 12-29, March.
    10. Alena Andrejovska & Jozef Glova & Martina Regaskova & Natalia Slyvkanyc, 2024. "The impact of the effective tax rate change on financial assets of commercial banks: The case of Visegrad group countries," E&M Economics and Management, Technical University of Liberec, Faculty of Economics, vol. 27(1), pages 175-191, March.
    11. Becchetti, L. & Ferrari, M. & Trenta, U., 2014. "The impact of the French Tobin tax," Journal of Financial Stability, Elsevier, vol. 15(C), pages 127-148.
    12. Minoru Hayashida & Hiroyuki Ono, 2011. "Turnover tax, transaction cost and stock trading volume revisited: investigation of the Japanese case," Applied Financial Economics, Taylor & Francis Journals, vol. 21(24), pages 1809-1817, December.
    13. Dean Baker, 2010. "Responses to Criticisms of Taxes on Financial Speculation," CEPR Reports and Issue Briefs 2010-01, Center for Economic and Policy Research (CEPR).
    14. Sebastián Cano-Berlanga & José-Manuel Giménez-Gómez, 2018. "On Chinese stock markets: How have they evolved over time?," Annals of Operations Research, Springer, vol. 266(1), pages 499-510, July.
    15. Eichfelder, Sebastian & Lau, Mona & Noth, Felix, 2018. "The impact of financial transaction taxes on stock markets: Short-run effects, long-run effects, and migration," arqus Discussion Papers in Quantitative Tax Research 228, arqus - Arbeitskreis Quantitative Steuerlehre.
    16. Capelle-Blancard, Gunther & Havrylchyk, Olena, 2016. "The impact of the French securities transaction tax on market liquidity and volatility," International Review of Financial Analysis, Elsevier, vol. 47(C), pages 166-178.
    17. Parthasarathi Shome, 2011. "Financial Transactions Taxes," Working Papers id:3930, eSocialSciences.
    18. Andrea Morone & Pasquale Marcello Falcone & Simone Nuzzo & Piergiuseppe Morone, 2020. "Does a ‘financial transaction tax’ drive out information mirages? An experimental analysis," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 15(4), pages 793-820, October.
    19. Ferdinand Fichtner & Kerstin Bernoth & Franziska Bremus & Karl Brenke & Christian Dreger & Burcu Erdogan & Hendrik Hagedorn & Vladimir Kuzin & Katharina Moll & Maximilian Podstawski & Jasper Scheppe &, 2010. "Sommergrundlinien 2010," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 77(26), pages 2-28.
    20. European Commission, 2010. "Innovative Financing at a Global Level," Taxation Studies 0031, Directorate General Taxation and Customs Union, European Commission.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aii:ijcmss:v:1:y:2010:i:1:p:30-42. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mr. Asif Anjum (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.