Commodities Adam Maitin Colgate Finance Club – Spring 2011.

Slides:

Advertisements

Similar presentations

Agricultural Commodities

Advertisements

Energy Market Tutorial Presented by Company Webb.

Getting In and Out of Futures Contracts By Peter Lang and Chris Schafer.

Forward and Futures. Forward Contracts A forward contract is an agreement to buy or sell an asset at a certain time in the future for a certain price.

Mr. Giesler Economics. Why Are Gas Prices So High?  High gas prices are generally caused by high prices for crude oil, which accounts for 55% of the.

Getting Into and Out of Futures Contracts BA 543 Xinwei WU 05/18/2011.

AN INTRODUCTION TO DERIVATIVE SECURITIES

Brief history of Derivatives History of derivatives is quite colorful and surprisingly a lot longer than most people think In Genesis Chapter 29, believed.

AN INTRODUCTION TO DERIVATIVE INSTRUMENTS

Simulation & Black-Scholes Pricing.  Brokerage Account and Live Data from Exchanges  Activate Some Strategies  Document Intent, Execute and Resolve.

Portfolio Diversification using Financial Derivatives Presented by: Amro Abdu Middle East Head of Sales.

Chapter 14 Futures Contracts Futures Contracts Our goal in this chapter is to discuss the basics of futures contracts and how their prices are quoted.

Chapter 33 Energy and Commodity Derivatives

Trading Strategies & Simulation. Working Basic Profiles ► Buy Call ► Sell Call ► Buy Put ► Sell Put.

Copyright© JSE Limited “Grow” your understanding about trading commodity derivatives….. 1.

Commodity Exchange Anit Chandran(08) Geostany Jose(29)

Natural Gas Makes the Future Work. 2 Outline Natural Gas in Relation to Other Commodities Today’s Market Fundamentals Natural Gas: Jobs, Revenue & Environment.

Seminar: Timely Topics for Today’s Business World Mr. Bernstein Futures January 14, 2015.

Chapter 16 Commodities and Financial Futures. Copyright © 2005 Pearson Addison-Wesley. All rights reserved Commodities and Financial Futures Learning.

Introduction to Futures Markets. History  The first U.S. futures exchange was the Chicago Board of Trade (CBOT), formed in  Other U.S. exchanges.

FINANCE IN A CANADIAN SETTING Sixth Canadian Edition Lusztig, Cleary, Schwab.

MANGAL KESHAV MK COMMODITY BROKERS LTD.. MANGAL KESHAV Snapshot of Indian Commodity Market.

International Developments in Futures and Options Maia Manock Thomas Graf.

FUTURES NICK PIANTEK. WHAT ARE FUTURES?? Futures are contracts to buy or sell a specific commodity on a specific day for a present price.

Copyright © 2008 Pearson Addison-Wesley. All rights reserved. Chapter 15 Commodities and Financial Futures.

THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, AS TO ACCURACY, COMPLETENESS, OR RESULTS OBTAINED FROM ANY INFORMATION DISCUSSED DURING HAWKTRADE MEETINGS.

1 Essential Question: Explain why and how people invest in stocks and how stock prices are determined; compare and contrast bonds to stocks; define what.

Learning Objectives “The BIG picture” Chapter 20; do p # Learning Objectives “The BIG picture” Chapter 20; do p # review question #1-7; problems.

Passive Investors and Managed Money in Commodity Futures Part 3: Volatility Prepared for: The CME Group Prepared by: October, 2008.

Certificate for Introduction to Securities & Investment (Cert.ISI) Unit 1 Lesson 35:  Derivatives and commodity markets  Base and precious metals  Energy.

ADNEOM T ECHNOLOGIES : EXPERTS STRIVING FOR EXCELLENCE ADNEOM B ENELUX EXPERTS STRIVING FOR EXCELLENCE WWW. ADNEOM. COM ADNEOM B ENELUX.

Commodity Trading and Risk Management : Stress Testing Emmanuel Fragnière Haute École de Gestion de Genève Option Majeure en Commodity Trading 1 Haute.

What are Commodities? Commodities are goods that have a universal price around the world. Gold, for example, has the same price per ounce in Brazil and.

International Commodity Exchanges. auction. The United States, Japan, United Kingdom, Brazil, Australia, Singapore are homes to leading commodity futures.

Forward and Futures. Forward Contracts A forward contract is an agreement to buy or sell an asset at a certain time in the future for a certain price.

Introduction Chapter 1 Options, Futures, and Other Derivatives, 7th International Edition, Copyright © John C. Hull

McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 16 Commodities and Financial Futures.

SECTION IV DERIVATIVES. FUTURES AND OPTIONS CONTRACTS RISK MANAGEMENT TOOLS THEY ARE THE AGREEMENTS ON BUYING AND SELLING OF THESE INSTRUMENTS AT THE.

1 Winter Outlook Heating season Natural gas at low end of rising commodity tide Commodity price changes since January Source: CME Group,

1 C HAPTER 14 Chapter Sections: Futures Contracts Basics Why Futures? Futures Trading Accounts Cash Prices versus Futures Prices Stock Index Futures Futures.

0 Forwards, futures swaps and options WORKBOOK By Ramon Rabinovitch.

The constituents of the DJUBS Commodities Index 15.96% WTI crude oil 9.84% Wheat 8.94% Corn 7.14% Live cattle 6.49% Soybeans 6.27% Brent crude oil 6.13%

DER I VAT I VES WEEK 7. Financial Markets  Spot/Cash Markets  Equity Market (Stock Exchanges)  Bill and Bond Markets  Foreign Exchange  Derivative.

The State of Commodities Boom, Bubble or Bust? Julia E. Bussie, CMT Money Mentor Solana Beach, CA October 9, 2004.

Futures Trading & your returns on Investments Futures contracts are financial assets just like stocks and bonds, but with some important differences.

Futures Futures are binding contracts that involve risk, and are time bound Unlike options, they are the obligation (not right) to buy or sell an underlying.

 stuff that is traded on the market without a difference of quality  supplies from different suppliers are mutually substitutable  products of uniform.

Unit 4 Investing. I. Investing / A. Investing vs. Saving / 1. Investing - putting money to work to earn a profit / 2. Saving - foregoing present spending.

SENG3011 Project The project will build on last week’s lecture on trading The common theme will be commodities trading The use of information systems for.

Edexcel GCSE Business Studies © Pearson Education 2009 Chapter 24 Key terms Reveal the key term by clicking the forward arrow on your keyboard. Commodities.

Mechanics of Futures Markets Chapter 2 (all editions)

Commodity Challenge Chapter 5: Futures markets and commodities traded.

DCX on B-School. FUTURES AND DERIVATIVE MARKET (FUNDAMENTAL SESSION ) Tips and Tools for Future Market Trading and Investment DCX Nepal Derivative and.

Commodity Derivatives Commodity derivatives. COMMODITY DEFINED :-  Every kind of movable goods excluding money and securities.  Commodities include:-

MANGAL KESHAV Dhanashri Academy. MANGAL KESHAV Snapshot of Indian Commodity Market.

FUTURES AND DERIVATIVES UNIT 18. WHAT DO YOU REMEMBER ABOUT HEDGE FUNDS?   Watch the video and compare your answers.  

Futures Explained Pt.1 Exchanges, Settlement & Watchlists.

LESSON 13 Futures Trading. In finance, a futures contract (more colloquially, futures) is a standardized forward contract which can be easily traded between.

TYPES OF FINANCIAL FUTURES CONTRACTS

FUTURES AND DERIVATIVES

CISI – Financial Products, Markets & Services

Accurate Commodity Tips, Silver Trading Tips, Crude Oil Trading Tips

Understanding Agricultural Futures

Commodity market.

Chapter 15 Commodities and Financial Futures.

7ReasonsWhyYouShouldPrefer Commodity Over Equity Although most investors invest in the stock market, many have ignored the drawing materials. Materials.

Trading in Oil, Gold and Other Commodities

Introduction of Derivative Market

Fintech Chapter 11: Commodities

Free Trading Tips | MCX Free Tips | Commodities | Stocks | Share Market Ideas.

Presentation transcript:

Commodities Adam Maitin Colgate Finance Club – Spring 2011

What is a Commodity Commodities are often substances that come out of the earth and maintain roughly a universal price. Examples of commodities include iron ore, crude oil, coal, salt, sugar, coffee, beans, soybeans, aluminum, copper, rice, wheat, gold, silver, palladium, platinum.

How is Price Determined Prices are universal and fluctuate daily based on global supply and demand. The inventory of commodities plays a role in the pricing, with low inventories typically leading to more volatile future prices and increasing the risk of of a stockout (inventory exhaustion)

How to Trade Commodity Futures Commodity futures trading involves buying and selling contracts for the future delivery of physical raw materials. The futures market allows producers and consumers of each product to engage in risk management. Although making the actual futures contract trade is similar to buying and selling shares of stock, the trade is different in that almost all futures are bought on margin. As a result profits and losses are magnified.

Exchanges Chicago Board of Trade (CBOT) Chicago Mercantile Exchange (CME) Dalian Commodity Exchange (DCE) Euronext.liffe (LIFFE) Kansas City Board of Trade (KCBT) Kuala Lumpur Futures Exchange (KLSE) London Metal Exchange (LME) New York Mercantile Exchange (NYMEX) National Commodity Exchange Limited (NCEL) Multi Commodity Exchange (MCX) International Indonesian Forex Change Market (IIFCM)

Indexes

Commodity Relationships

Oil and Natural Gas

Brent Crude Brent Crude is the biggest of the many classifications of crude oil. The other well-known classifications are the OPEC Reference Basket, Dubai Crude and West Texas Intermediate (WTI) Recently there has been a divergence as wide as $11 in the price between Brent and WTI.

Natural Gas Nat. Gas is difficult to store and transport. There are many types of natural gas. The price varies greatly depending on weather, location and type of consumer. Recently, we have seen the price stagnate because of low demand. As a result, national supply as well as Canadian imports have decreased.

Gold Will the price of gold stop rising? Why is the price so high? When investors are fearful of the markets, they put their money in gold. It is viewed as a safe investment when markets are bearish and or volatile.

US Dollar Index