8/3/2019 If- Comm Futures Deepa and Ankita & Rohan

1/13

Presented By:-

Ankita Shah - 166Rohan Dani - 164Jimmit Dand -165Deepa Scahnandani -167

8/3/2019 If- Comm Futures Deepa and Ankita & Rohan

2/13

WHAT IS COMMODITY MARKET?

Commodity markets are markets where rawor primary products are exchanged.

It covers physical product (food, metals,electricity) markets but not the ways thatservices, including those of governments, norinvestment nor debt, can be seen as a

commodity.

8/3/2019 If- Comm Futures Deepa and Ankita & Rohan

3/13

WHAT IS COMMODITY FUTURES

A financial Contract

The underlying commodity is bought or soldat a future date

A tool used by Investors, Hedgers,Arbitragers, Day traders

8/3/2019 If- Comm Futures Deepa and Ankita & Rohan

4/13

COMMODITY FUTURES TRADING

COMMISSION

The U.S. Commodity Futures Trading Commission (CFTC) isan independent agency of the United States government thatregulates futures and option markets.

The Commodity Exchange Act (CEA), 7 U.S.C. 1 et seq.,prohibits fraudulent conduct in the trading of futures contracts.

In 1974, Congress amended the Act to create a morecomprehensive regulatory framework for the trading of futurescontracts and created the Commodity Futures Trading

Commission

8/3/2019 If- Comm Futures Deepa and Ankita & Rohan

5/13

HISTORY

Futures contracts for agricultural commodities have beentraded in the U.S. for more than 150 years and have beenunder Federal regulation since the 1920s.

In recent years, trading in futures contracts has expandedrapidly beyond traditional physical and agriculturalcommodities into a vast array of financial instrumentsincluding

foreign currencies, U.S. and foreign government securities, and U.S.and foreign stock indices.

8/3/2019 If- Comm Futures Deepa and Ankita & Rohan

6/13

EVOLVING MISSION AND RESPOSIBILITIES

Congress created the CFTC in 1974 as an independentagency with the mandate to regulate commodity futures andoption markets in the United States

In December 2000 when Congress passed the CommodityFutures Modernization Act of 2000, which instructed theSecurities & Exchange Commission and the CFTC to developa joint regulatory regime for single-stock futures, and theproducts subsequently began trading in November 2002.

Today, the CFTC assures the economic utility of the futuresmarkets

encouraging their competitiveness and efficiency

ensuring their integrity

protecting market participants against manipulation, abusive trading

practices, and fraud ensuring the financial integrity of the clearing process.

8/3/2019 If- Comm Futures Deepa and Ankita & Rohan

7/13

OVER-THE-COUNTER DERIVATIVES

Brooksley Born and her chairmanship of the Commission from August26, 1996, to June 1, 1999, was the focus of a October 2009 Frontlinedocumentary titled "The Warning" and was also chronicled in thedocumentary Inside Job.

The two films recount her attempts to investigate and possibly regulate

the over-the-counter (OTC) derivatives market. Two actions by the CFTC in 1998 led some market participants to

express concerns that the CFTC might modify the "Swap Exemption"and attempt to impose new regulations on the swap market

First, in a comment letter addressing the SEC's "broker-dealer lite"proposal, the CFTC stated that the SEC's proposal would create thepotential for conflict with the Commodity Exchange Act (CEA) to theextent that certain OTC derivative instruments fall within the ambit of theCEA and are subject to the exclusive statutory authority of the CFTC.

8/3/2019 If- Comm Futures Deepa and Ankita & Rohan

8/13

PARTICIPANTS IN COMMODITIES MARKETS

Two basic types of participants in commodities marketshedgers and speculators.

Hedgers - seek to minimize &manage price risk

Speculators - take on risk in the

hope of making a profit.

8/3/2019 If- Comm Futures Deepa and Ankita & Rohan

9/13

LIST OF TRADED COMMODITY

AGRICULTURAL

Corn, Palm oil, Soybeans, wheat

ENERGY

Heating Gas, Natural Gas, Oil, Unleaded Gas

METALS

Copper, gold, platinum, silver

MEAT & LIVESTOCK

Feeder Cattle, Lean Hogs, Livestock, Pork Bellies

8/3/2019 If- Comm Futures Deepa and Ankita & Rohan

10/13

Commodity Symbol Avg Daily Vl.

Crude Oil CL 516868

Gasoline RB 93672

Natural Gas NG 203934

Energy Futures

Commodity Symbol Avg Daily Vl.Platinum PL 4746

Gold GC 104772

Silver SI 39505

Copper HG 30088

Metal Futures

8/3/2019 If- Comm Futures Deepa and Ankita & Rohan

11/13

Agricultural Product Slate at NYMEX

8/3/2019 If- Comm Futures Deepa and Ankita & Rohan

12/13

COMMODITY EXCHANGES

Chicago Board Options Exchange (CBOE Chicago Board of Trade (CBOT)

Chicago Butter and Egg Board

Chicago Mercantile Exchange (CME)

Chicago Climate Exchange Chicago Mercantile Exchange(CME)

Commodity Exchange(COMEX)

International Monetary Market (IMM)

Kansas City Board of Trade (KCBT) Minneapolis Grain Exchange(MGEX)

New York Board of Trade(NYBOT)

New York Mercantile Exchange(NYMEX)

8/3/2019 If- Comm Futures Deepa and Ankita & Rohan

13/13

RECENT DEVELOPMENTS

Position limits on 28 physical commodity futures (and swaps)contracts.

9 agricultural contracts (such as CBOT Corn and ICEFutures U.S. Cocoa),

4 energy contracts (such as Hub Natural Gas and NYMEXNYH Gasoline Blendstock),

5 metals contracts (such as COMEX Copper and NYMEXPlatinum)

CFTC approved an application to launch The Trend Exchange,a market where investors can trade futures contracts based onopening-weekend movie revenues in the United States.