GTUs Enrollment No: 00000000000000

A
Project report on



At


Submitted By:
PUJA CHAURASIYA (Roll No: A1205)
TRUSHNA NAYAK (Roll No:A1215)
MBA Programme 2012 2014 (Semester II)

I n partial fulfillment of the requirements for Summer Internship Programme for the award of
the degree of
MASTER OF BUSINESS ADMINISTRATION




Submitted to:
Gujarat Technological University (GTU), Ahmedabad

Investor awareness towards commodity market




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Declaration

The project report entitled Investor awareness towards commodity market has been
submitted to Gujarat Technological University, Ahmedabad in partial fulfillment for the award
of degree of Master of Business Administration. We are undersigned hereby declare that this
report has been completed by us under the guidance of Mr.Arpit Dave (Angel
Broking).Professor Mr. Nishad Darji (Faculty Member, Shayona Institute of Business
Management, Ahmedabad)

The report is entirely the result of my own efforts and has not been submitted either in part or
whole to any other institute or university for any degree.


Name of the Student with Signature: PUJA CHAURASIYA
TRUSHNA NAYAK

GTUs Enrollment No.:

Date: 25
th
July, 2013
Place: Ahmedabad





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Certificate

This is to certify that he project titled Investor awareness towards commodity market is a
work done by (Puja Chaurasiya & TrushnaNayak) student of Shayona Institute of Business
Management (SIBM). The student has successfully completed this project under my guidance.


We are sure that the experience gained during the project work will enable (him/her) to take
similar challenging projects in future.






(Prof. Nishad Darji)






Date:25
th
July, 2013

Place: Ahmedabad
Dr. B. K. Nirmal
(HOD MBA Programme)



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Preface
As a part of MBA, we learn about Angel broking company for practical training and also studied
studied on the working of its different services and prepare report on particular topic. We felt
that this unit is being run superbly by excellent management team, and employees co-operation.


It is universal truth that every work has 2 aspects. In education, we can apply this approach.in
equation are thing is theretical aspects. Management student must have practical
aspects.management students have a some practical knowledge about business. Our practical
knowledge helps us to face a problem not theretical.


It is my pleasure to present work after we had finished my project at angel broking this project
has expanded my horizon of knowledge in practical as well as theoretical which are vital for any
student in management level studies. After completion of this project we enhance our knowledge
and come to know about the services or products.









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Acknowledgement

It is almost inevitable to incur indebtedness to all who generously helped by sharing their
invaluable time and rich experience with me, without which this project would have never been
accomplished.

No task can be achieved alone, particularly while attempting to finish a project of such
magnitude. It took many special people to facilitate it and support it. Hence, We would like to
acknowledge all of their valuable support and convey my humble gratitude to them. We would
like to thank Prof. Mr.Nishad Darji of Shayona Institute of Business Management (SIBM)
for their guidance throughout the preparation of the project and for their valued suggestion.

We express our sincere thanks to the management of Angel broking for giving us this golden
opportunity to work as a trainee in their company. The guidance and support provided by
the company have really made the training a learning experience for us. This short period was
full of rich experience, which will definitely help me in my future career.

First of all, We would like thanking Mr.Arpit Dave (Angel Broking / C.G. Road HO )and
other our team leader Malav Shah & Urvish Bhavsar,staff member for their valuable guidance
and encouragement.







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EXECUTIVE SUMMARY:

One of the interesting developments in financial market over the last 15 to 20 years has been the
growing popularity of derivatives. In many situations, both hedgers and speculators find it more
attractive to trade a derivative on an asset, commodity than to trade asset and commodity itself.
Some commodity derivatives are traded on exchanges.

In this report We have included history of commodity market. Than We have included
commodity market in India. And after that We have discussed the mechanism of trading in
commodity market in India.

In this report we have taken a first look at forward, futures and options contract and other risk
management instruments. Than after We have discuss the main components of future commodity
trading like contract size, what actual margin is and delivery system etc. There are mainly three
types of traders: hedgers, speculators and arbitrageurs.

In the next section, We discuss about the two major commodity exchanges in India that is MCX
AND NCDEX. How they are worked for developing this commodity market in India. Then after
We have discussed about the present scenario of commodity market in India.

In the next We have tried to analyze the trading pattern and investment pattern of commodity
traders . This we have done through the help of QUESTIONER, which contains 13 questions.

On the basis of different charts prepared, We have at the end given the research findings and
conclusion. And on the basis of our findings We have given suggestion and recommendation






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Table of Contents:

Sr.no Particulars P.n.
Ch.1 Introduction to research 8
1.1 Introduction to the Angel/commodity 9
1.2 Research problem 12
1.3 Scope of research 12
1.4 Research objective 13
1.5 Research design 13
1.5.1 Methods of data collection 13
1.5.2 Sample design 14
1.5.2.1 Sampling methods 14
1.5.2.2 Sample unit 15
1.5.2.3 Sample size 15
1.5.2.4 Target area 15
1.5.3 Tools & techniques 15
1.6 Data analysis 15
1.7 Limitation 15

Ch-2 Introduction to Angel 16
2.1 Industry scenario 22
2.2 Organization details 47
2.2.1 Hierarchy of key persons 47
2.2.2 Product lines 48
2.2.3 Swot of the industry 50

Ch-3 Literature review 52


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Ch-4 Data analysis & interpretation 56

Ch-5 5.1 Findings & Conclusion 72
5.2 Suggestion &Recommendation 74
5.3 Learning from the project 76

Ch-6 Bibliography 76

Ch-7 Appendices 78



















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CHAPTER-1
INTRODUCTION TO
RESEARCH





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Introduction to the commodity

A commodity may be defined as an article, a product or material that is bought and sold. It can
be classified as every kind of movable property, except Actionable Claims, Money & Securities.
Commodities actually offer immense potential to become a separate asset class for market-savvy
investors, arbitrageurs and speculators. Retail investors, who claim to understand the equity
markets, may find commodities an unfathomable market. But commodities are easy to
understand as far as fundamentals of demand and supply are concerned. Retail investors should
understand the risks and advantages of trading in commodities futures before taking a leap.
Historically, pricing in commodities futures has been less volatile compared with equity and
bonds, thus providing an efficient portfolio diversification option.

Commodity Market

Commodity markets are markets where raw or primary products are exchanged. These raw
commodities are traded on regulated commodities exchanges, in which they are bought and sold
in standardized contracts
Commodity market is an important constituent of the financial markets of any country. It is the
market where a wide range of products, viz., precious metals, base metals, crude oil, energy and
soft commodities like palm oil, coffee etc. are traded. It is important to develop a vibrant, active
and liquid commodity market. This would help investors hedge their commodity risk, take
speculative positions in commodities and exploit arbitrage opportunities in the market.
Commodity market is extremely liquid, risky and complex by nature. Futures market is
centralized market place for buyers and sellers from around the world who meet and enter into
commodity futures contracts. Pricing is mostly is based on an open cry system, or bids and offers
that can be matched electronically. The commodity contract will state the price that will be paid
and the date of delivery. Almost all futures contracts end without the actual physical delivery of
commodity.


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Indian Commodity Market

The vast geographical extent of India and her huge population is aptly complemented by the size
of her market. The broadest classification of the Indian Market can be made in terms of the
commodity market and the bond market. The commodity market in India comprises of all
palpable markets that we come across in our daily lives. Such markets are social institutions that
facilitate exchange of goods for money. The cost of goods is estimated in terms of domestic
currency. India Commodity Market can be subdivided into the following two categories:



1. Wholesale Market
2. Retail Market

Commodity
Market
Wholesale
Market
Retail
Market

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The traditional wholesale market in India dealt with whole sellers who bought goods
from the farmers and manufacturers and then sold them to the retailers after making a
profit in the process. It was the retailers who finally sold the goods to the consumers.
With the passage of time the importance of whole sellers began to fade out for the
following reasons:

The whole sellers in most situations, acted as mere parasites that did not add any value to
the product but raised its price which was eventually faced by the consumers.
The improvement in transport facilities made the retailers directly interact with the
producers and hence the need for whole sellers was not felt.

In recent years, the extent of the retail market (both organized and unorganized) has
evolved in leaps and bounds. In fact, the success stories of the commodity market of
India in recent years has mainly centered on the growth generated by the Retail Sector.
Almost every commodity under the sun both agricultural and industrial is now being
provided at well distributed retail outlets throughout the country.

Moreover, the retail outlets belong to both the organized as well as the unorganized
sector. The unorganized retail outlets of the yesteryears consist of small shop owners who
are price takers where consumers face a highly competitive price structure. The organized
sectors on the other hand are owned by various business houses like Pantaloons,
Reliance, Tata and others. Such markets are usually selling a wide range of articles
agricultural and manufactured, edible and
inedible, perishable and durable. Modern marketing strategies and other techniques of
sales promotion enable such markets to draw customers from every section of the society.
However the growth of such markets has still centered on the urban areas primarily due
to infrastructural limitations.

Considering the present growth rate, the total valuation of the Indian Retail Market is
estimated to cross Rs. 10,000 billion by the year 2010. Demand for commodities is likely
to become four times by 2010 than what it presently is.

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The size of the commodities markets in India is also quite significant. Of the country's
GDP of Rs 13, 20,730 crore (Rs 13,207.3 billion), commodities related (and dependent)
industries constitute about 58 per cent. Currently, the various commodities across the
country clock an annual turnover of Rs 1, 40,000 crore (Rs 1,400 billion). With the
introduction of futures trading, the size of the commodities market grows many folds here
on.


1.1 Research problem

The first and foremost of the analysis is the limited number of respondents because of
limited respondents 100, the complete scenario of the current broking industry is not
available.

A study & analysis with investor awareness towards commodity market for angel
broking.


1.3Scope of research

This study is l imit ed to onl y Ahmedabad Cit y the study is carri ed out to know
the awareness l evel of i nvest ors towards Commodi t y market.
This st udy al so helps to know about t radi ng mechanism of Commodit y Market &
the future trading level .
Here our scope of research will be how we can increase the awareness of
investors i n commodit y market.

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1.4 Research objective

To know the perception of investors towards commodity future market.

To find the awareness level of commodity market in Ahmedabad city.

To understand the commodity market and its working mechanism.

To know which commodity they prefer to invest.


1.5 Research Design

1.5.1 Methods of data collection

There are two types of data collection method.
(a) Primary data
(b) Secondary data

(a) Primary data:

Primary data is used to collect initial material during the research process. Primary Data
is the data that the researcher collects himself using methods such as Surveys, Direct
Observation, and Interviews. Primary Sources of information allow the learner to access
original and unedited information.


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In this Project Report we collected Data by using Survey Method. The Primary Data has
been collected by filling Questionnaires. The Questionnaires contain both Open Ended &
Close Ended Questions.

It is obtained from the residents of Ahmedabad.

(b) Secondary data:


Secondary Sources are edited Primary Sources. Secondary Data is the data that were
collected by someone for purpose other than solving the problem at hand. They are one of
the cheapest & easiest means of access to information. Secondary Data Analysis is
commonly known as Second hand Analysis.


The biggest advantage of using secondary data is economics. Someone else has already
collected the data, so the researcher does not have to devote money, time, energy, and
other resources to this phase of research.


1.5.2 Sample design

1.5.2.1 SAMPLING TYPE

In this project convenient sampling method is used for the selection ofcustomer.






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1.5.2.2 SAMPLING UNIT

Customers of Angel Broking limited.

1.5.2.3 SAMPLE SIZE: 100

1.5.2.4 TARGET AREA :Ahmedabad city

1.5.3 Tools/techniques used for data analysis: Tables and graphs

1.6 LIMITATIONS

This survey was restricted to Ahmedabad city.

The sample size for the survey of people was limited to 100 respondents, which mightnot be
representing the whole country.

The results are totally derived from the respondents answers. There might be a
difference between the actual and projected results.

Research also depends on surveyors bias & his/her ability to analyze the data &
drawconclusion.

The time duration to carry out the survey of all the areas of Ahmedabad was very short.





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CHAPTER-2
INTRODUCTION TO
ANGEL






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Introduction

NAME OF THE COMPANY

ANGEL BROKING

LOGO OF THE COMPANY









Starting right makes a big difference

Angel Broking's tryst with excellence in customer relations began more than 20 years ago.
Today, Angel has emerged as a premium Indian stock-broking and wealth management house,
with an absolute focus on retail business, and a commitment to provide "Real Value for Money"
to all its clients.

Mr. Dinesh Thakkars foresight and entrepreneurial skills made angel broking what it is today.
With just a team of three, he started business as a sub broker in a tiny office way back in 1987.
And since then, he hasnt looked back. Angel broking has emerged as one of the largest broking
House in the country. The members of angel broking are proud to receive the major volume

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Driver trophy by bse for seven consecutive years (2005-2011).










Angel have also bagged the coveted Bloomberg UTV financial leadership awards for best
Contribution in investors education and category enhancement of the year 2011 and dun and
Bread street equity broking awards 2011 for best retail broking house and fastest growing
Equity broking house.

Angel broking are a complete broking house,offering a plethora of retail-centric
services.Constantly generating value added service with out passing the cost burden onto our
clients.Better understanfding of clients need is our top priority.
Our e-broking facility is one such effort in this direction, which gives their clients a platform to
Access state of the art trading on a click of a button .



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Business

Equity Trading
Commodities
Portfolio Management Services
Mutual Funds
Life Insurance
Personal Loans
IPO
Depository Services
Investment Advisory

AngelGroup

Angel Broking Ltd.
Angel Commodities Broking Ltd.
Angel Securities Ltd

Angels membership- BSE, NSE, NCDEX AND MCX
Registered as a DP with CDSL.

Nation wide network

20 regional hubs

144 branch offices



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8500+ registered sub brokers/ authorized persons

Over 7.76+ lakh customers

4200+employees

Highest number of sub brokers on NSE and BSE.

SERVICES OF ANGEL :

Stock broking:
1. Cash Market
2. Derivatives Trading
3. Margin Trading
4. Internet Trading

Commodities Broking:

1. Commodities Futures
2. Financing Against Commodities
Depository Service:

A depository is like a bank wherein the deposits are securities in electronic form.






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1. NSDL (National Securities Depository Limited)







2. CDSL (Central Depository Services Limited)

IPO Subscription Services

Mutual Fund Products

Portfolio management

Insurance Services

Qualitative Research in Stock & Commodities

FUTURE SERVICES:

1. Private Banking Sector
2. Forex Market
3. Commodities Demat Service

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4. Product Enhancement in commodity market.

2.1 industry scenario


October,2011

Angel Broking bagged the Dun & Bradstreet Equity Broking Awards 2011 for 'Best Retail
Broking House' and 'Fastest Growing Equity Broking House' (Large Firms) at Dun & Bradstreet
Equity Broking Awards 2011.

March,2011

Angel Broking was awarded with 'Best in Contribution Investor Education & Category
Enhancement of the year' and 'Best Commodity Research of the year'

November,2010

Angel Broking bags the coveted Major Volume Driver Award by BSE for 2009-10

October,2009

Angel Broking bags the coveted Major Volume Driver Award by BSE for 2008-09

May,2009

Angel Broking wins two prestigious awards for 'Broking House with Largest Distribution
Network' and 'Best Retail Broking House' at Dun & Bradstreet Equity Broking Awards




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August,2008

Angel Broking crosses 5,00,000 mark in unique trading accounts

November,2008

Angel Broking wins the esteemed Major Volume Driver Award by BSE for 2007-2008

November,2007

Angel Broking augments its business with introduction of Insurance Distribution in alliance with
Birla Sun Life

November,2007

Angel Broking wins the honoured Major Volume Driver Award by BSE for 2006-2007

March,2007
Angel Broking crosses the benchmark of 2,00,000 unique trading accounts

December,2006

Angel Broking expands its network by creating 2500 business associates

October,2006

Angel Broking bags the coveted Major Volume Driver Award by BSE for 2005-2006

September,2006

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Angel Broking commences distribution of Mutual Funds and IPOs
July,2006

Angel Broking launches Portfolio Management Services (PMS)

March,2006

Angel Broking on expansion drive crosses 1,00,000 mark in unique trading accounts

October,2005

Angel Broking wins the prestigious Major Volume Driver Award by BSE for 2004-2005

September,2004

Angel Broking launches Online Trading Platform facilitating easy and hassle-free trading for its
customers

April,2004

Angel Broking expands its basket of services by establishing the Commodity Broking division

April,2003

Angel Broking publishes its first research report

November,2002

Angel Broking successfully conducts its first Investor Seminar to increase investor awareness


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March,2002

Angel Broking develops web-enabled back office software to maximize its operational efficiency

November,1998

Angel Capital and Debt Market Ltd. incorporated as a member of NSE

December,1997

Angel Broking Ltd incorporated as a wealth management, retail and corporate broking firm



















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WHY COMMODITIES MARKET?

India has very large agriculture production in number of agri-commodities, which needs
use of futures and derivatives as price-risk management system. Fundamentally price you
pay for goods and services depend greatly on how well business handle risk. By using
effectively futures and derivatives, businesses can minimize risks, thus lowering cost of
doing business.

Commodity players use it as a hedge mechanism as well as a means of making money.
For e.g. in the bullion markets, players hedge their risks by using futures Euro-Dollar
fluctuations and the international prices affecting it. For an agricultural country like India,
with plethora of mandis, trading in over 100 crops, the issues in price dissemination,
standards, certification and warehousing are bound to occur. Commodity Market will
serve as a suitable alternative to tackle all these problems efficiently.










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Commodities



Gold, Gold HNI, Gold M, I-Gold, Silver, Silver HNI, Silver M



Castor Oil, Castor Seeds, Coconut Cake, Coconut Oil, Cottonseed,rude Palm Oil,
Groundnut Oil,KapasiaKhalli (Cottonseed Oilcake), Mustard /Rapeseed Oil,Mustard
Seed (Sirsa), RBD Palmolein, Refined Soy Oil, Refined Sunflower Oil, Sesame Seed,
Soymeal, Soy Seeds




Cardamom, Jeera, Pepper, Red Chilli

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Aluminium, Copper, Lead, Nickel, Sponge Iron, Steel Flat, SteelLong (Bhavnagar),Steel
Long (Gobindgarh), Tin, Zinc










Cotton Long Staple , Cotton Medium Staple, Cotton Short Staple, Cotton Yarn, Kapasii








Chana, Masur, Tur, Urad, Yellow Peas,


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Basmati Rice, Maize, Rice, Sarbati Rice, Wheat










Brent Crude Oil, Crude Oil, Furnace Oil Middle East Sour Crude Oil









Arecanut, Cashew Kernel, Rubber




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High Density Polyethylene (HDPE), Polypropylene (PP), PVC












Guar Seed, Guar gum, Gurchaku, Mentha Oil, Potato, Sugar M-30,















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COMMODITY FUTURES

Commodity futures are simply the standard futures contracts traded through exchange. These
contracts have their respective commodity as underlying asset and derive the dynamics from it.
Such contracts allow the participant to buy and sell certain commodity at a certain price for
future delivery. Futures trading is a natural outgrowth of the problem of maintaining a year-
round supply of seasonal products like agriculture crops. The best thing about a commodity
futures contract is that it I generally leveraged giving opportunity to all types of investors to
participate. Characteristically, such a contract has an expiry and delivery attached with it.

WHY TRADE IN COMMODITIES?












WHY TRADE IN
COMMODITIES
Big market-
diverse
opportunities
Get to the sore
Huge
potential
Exploitable
fundamental

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Big market-diverse opportunities

India, a country with a population of over one billion, has an economy based on
agriculture, precious metals and base metals.
Thus, trading in commodities provides lucrative market opportunities for a wider
section of participants of diverse interests like investors, arbitragers, hedgers, traders,
manufacturers, planters, exporters and importers.

Get to the sore

Commodity trading has been a breakthrough in expanding the investment from
investing in a metal company to trading in metal itself.

Huge potential

Commodity exchanges see a tremendous daily turnover of more than Rs.15,000 cores.
This gives a lunge potential to market participant to make profits.

Exploitable fundamental

The fundamental for commodity trading is simple price is a function of demand and
supply so is hedging, by taking appropriate contract. This makes things really easy to
understand and exploit



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ADVANTAGE OF FUTURES TRADING

Futures trading remove the hassles and costs of settlement and storage for traders whodo not
want custody.Though, the most lucrative element of futures trading is that it allows investors
toparticipate and trade at nominal costs at a much lesser amount:

No longer need to put the whole amount for trading; only the margin is required.
No sales tax is applicable if the trade is required off. Sales tax is applicable only if
a trade results in delivery.

Traders can short sell. If a trader buys an equivalent contract back before the contractexpires, he
will be able to profit from a falling price. This is difficult in spot marketers because it requires
the seller to borrow the commodity. It is next to impossible for retailinvestors in case of
something like gold.All participants trade exactly the same notional right i.e. those defined on
the standardcontract, so the market grows deeper and more liquid in the standard futures contract
than inspot bullion where different qualities of bullion exit, each of which has different
prices.Greater liquidity provides a reliable real-time price something which is absolutely
notavailable in the OTC bullion market.

WHAT IS A COMMODITY FUTURE EXCHANGE?

Exchange is an association of members, which provides all organizational support forcarrying
out futures trading in a formal environment. These exchanges are managed by theBoard of
Directors, which is composed primarily of the members of the association. Thereare also
representatives of the government and public nominated by the Forward Markets Commission.
The majority of members of the Board have been chosen from among the members of the
Association who have trading and business interest in the exchange. Thechief executive officer
and his team in day-to-day administration assist the Board. There aredifferent classes of

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members who capitalize the exchange by way of participation in the formof equity, admission
fee, security deposits, registration fee etc.
a. Ordinary Members:

They are the promoters who have the right to have own accounttransactions without having the
right to execute transactions in the trading ring. They have toplace orders with trading members
or others who have the right to trade in the exchange.

b. Trading Members:

These members execute buy and sell orders in the trading ring of theexchange on their account,
on account of ordinary members and other clients.

c. Trading-cum-Clearing Members:

They have the right to trade and also to participate inclearing and settlement in respect of
transactions carried out on their account and on accountof their clients.

d. Institutional Clearing Members:

They have the right to participate in clearing andsettlement on behalf of other members but do
not have the trading rights.

e. Designated Clearing Bank:

It provides banking facilities in respect of pay-in, payout andother monetary settlements.The
composition of the members in an exchange however varies. In so me exchanges thereare
exclusive clearing members, broker members and registered non -members in addition tothe
above category of members.


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COMMODITY ORDERS

The buy and sell orders for commodity futures are executed on the trading floor where
floorbrokers congregate during the trading hours stipulated by the exchange. The
floorbrokers/trading members on receipt of orders from clients or from their office transmits the
same to others on the trading floor by hand signal and by calling out the orders (in an openoutcry
system they would like to place and price. After trade is made with another floorbroker who
takes the opposite side of the transaction for another customer or for his ownaccount, the details
of transactions are passed on to the clearing house through a transaction slip on the basis o which
the clearinghouse verifies the match and adds to its records.Following the experiences of stock
exchanges with electronic screen based tradingcommodity exchanges are also moving from
outdated open outcry system to automatedtrading system. Many leading commodity exchanges
in the world including ChicagoMercantile Exchange (CME), Chicago Board of Trade (CBOT),
International PetroleumExchange (IPE), London, have already computerized the trading
activities. In India, coffeefutures exchange, Bangalore has already put inplace the screen based
trading and many others are in the process of computerization. To addto modernization efforts,
the Bombay Commodity Exchange (BCE) has initiated for acommon electronic trading platform
connecting all commodity exchanges to conduct screenbased trading. In electronic trading,
trading takes place through a centralized computernetwork system to which all buy and sell
orders and their respective prices are keyed in fromvarious terminals of trading members. The
deal takes place when the central computer findsmatching price quotes for buy and sell. The
entire procedural steps involved in electronictrading beginning from placing the buy/sell order to
the confirmation of the transaction havebeen shown in figure -2.1 below.






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STRUCTURE OF COMMODITY MARKET





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Multi Commodity Exchange
(www.mcxindia.com)

This exchange was originally promoted by Financial Technologies Limited, a software company
in the capital markets space. Subsequently other institutional shareholders have been added on.
MCX is popular for trading in metals and energy contracts.



Commodities
MCX
Warehouses
Clearing
Bank
Quality
Certification
Agencies
Traders
(speculators)
arbitrageurs/
client
Producers
(Farmers/Co
-
operatives/In
stitutional)
Hedger
(Exporters /
Millers
Industry)
Consumers
(Retail/Instit
utional)
Transporters
/Support
agencies

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Recent Developments in India

The advent of economic liberalization helped the cause of laying emphasis on the importance
of commodity trading. By the beginning of 2002, there were about 20 commodity exchanges in
India, trading in 42 commodities, with a few commodities being traded internationally.


Commodities futures contracts and the exchanges they trade in are governed by the Forward
Contracts (Regulation) Act, 1952. The regulator is the Forward Markets Commission (FMC), a
division of the Ministry of Consumer Affairs, Food and Public Distribution.


In 2002, the Government of India allowed the re-introduction of commodity futures in India.
Together with this, three screen based,nation-wide multi-commodity exchanges were also
permitted to be set up with the approval of the Forward Markets Commission. These are:

1. National Commodity & Derivative Exchange
(www.ncdex.com)

This exchange was originally promoted by ICICI Bank, National Stock Exchange (NSE),
National Bank for Agriculture and Rural Development (NABARD) and Life Insurance
Corporation of India (LIC). Subsequently other institutional shareholders have been added on.
NCDEX is popular for trading in agricultural commodities.

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National Commodity & Derivatives Exchange Limited (NCDEX) is a professionally online multi
commodity exchange promoted by ICICI Bank Limited (ICICI Bank), Life Insurance Corporation of
India (LIC), National Bank for Agriculture and Rural Development (NABARD) and National Stock
Exchange of India Limited (NSE). Punjab National Bank (PNB), CRISIL Limited (formerly the
Credit Rating Information Services of India Limited), Indian Farmers Fertilizer Cooperative Limited
(IFFCO) and Canara Bank by subscribing to the equity shares have joined the initial promoters as
shareholders of the Exchange. NCDEX is the only commodity exchange in the country promoted by
national level institutions. This unique parentage enables it to offer a bouquet of benefits, which are
currently in short supply in the commodity markets. The institutional promoters of NCDEX are
prominent players in their respective fields and bring with them institutional building experience,
trust, nationwide reach, technology and risk management skills. NCDEX is a public limited company
incorporated on April 23, 2003 under the Companies Act, 1956. It obtained its Certificate for
Commencement of Business on May 9, 2003. It has commenced its operations on December 15,
2003.





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2. Multi Commodity Exchange
(www.mcxindia.com)










This exchange was originally promoted by Financial Technologies Limited, a software company
in the capital markets space. Subsequently other institutional shareholders have been added on.
MCX is popular for trading in metals and energy contracts.

3. National Multi Commodity Exchange of India
(www.nmce.com)

This exchange was originally promoted by Kailash Gupta, an Ahmedabad based trader, and
Central Warehousing Corporation (CWC). Subsequently other institutional shareholders have
been added on. NMCE is popular for trading in spices and plantation crops, especially from
Kerala, a southern state of India.


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Commodities traded in Commodity Exchanges :

Large numbers of commodity are traded on commodity exchanges in around the world. The
commodities are classified on the basis of their use and consumption. Further classification is
based on the characteristics of the commodity. Some of the commodities traded on various
futures exchanges are as follows:


Foodstuff Industrial Metals Precious Metal Energy
Coffee Copper Gold Crude Oil
Sugar Lead Platinum Natural Gas
Cocoa Zinc Palladium
Maize Tin Silver
Roughrice Aluminium
Soybean Nickel
Wheat Recycled
Sunflower Oil
Barley
Orange Juice







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Major Players In Commodity market





Hedgers:

A Hedger can be Farmers, manufacturers, importers and exporter. A hedger buys or sells in the
futures market to secure the future price of a commodity intended to be sold at a later date in the
cash market. This helps protect against price risks.

Major
Players In
Commodity
market
Hedger
Speculator Arbitrage

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The holders of the long position in futures contracts (buyers of the commodity), are trying to
secure as low a price as possible. The short holders of the contract (sellers of the commodity)
will want to secure as high a price as possible. The commodity contract, however, provides a
definite price certainty for both parties, which reduces the risks associated with price volatility.
By means of futures contracts, Hedging can also be used as a means to lock in an acceptable
price margin between the cost of the raw material and the retail cost of the final product sold.

Speculator:

Other commodity market participants, however, do not aim to minimize risk but rather to
benefit from the inherently risky nature of the commodity market. These are the
speculators, and they aim to profit from the very price change that hedgers are protecting
themselves against. A hedger would want to minimize their risk no matter what they're
investing in, while speculators want to increase their risk and therefore maximize their
profits. In the commodity market, a speculator buying a contract low in order to sell high
in the future would most likely be buying that contract from a hedger selling a contract
low in anticipation of declining prices in the future.

Unlike the hedger, the speculator does not actually seek to own the commodity in
question. Rather, he or she will enter the market seeking profits by off setting rising and
declining prices through the buying and selling of contracts.

In a fast-paced market into which information is continuously being fed, speculators and
hedgers bounce off of--and benefit from--each other. The closer it gets to the time of the
contract's expiration, the more solid the information entering the market will be regarding
the commodity in question. Thus, all can expect a more accurate reflection of supply and
demand and the corresponding price. Regulatory Bodies the United States' futures market
is regulated by the Commodity Futures Trading Commission, CFTC, and an independent
agency of the U.S. government. The market is also subject to regulation by the National

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Futures Association, NFA, a self-regulatory body authorized by the U.S. Congress and
subject to CFTC supervision.

A Commodity broker and/or firm must be registered with the CFTC in order to issue or
buy or sell futures contracts. Futures brokers must also be registered with the NFA and
the CFTC in order to conduct business. The CFTC has the power to seek criminal
prosecution through the Department of Justice in cases of illegal activity, while violations
against the NFA's business ethics and code of conduct can permanently bar a company or
a person from dealing on the futures exchange. It is imperative for investors wanting to
enter the futures market to understand these regulations and make sure that the brokers,
traders or companies acting on their behalf are licensed by the CFTC.

Arbitrage:

Arbitrage refers to the opportunity of taking advantage between the price difference
between two different markets for that same stock or commodity.

In simple terms one can understand by an example of a commodity selling in one market
at price x and the same commodity selling in another market at price x + y. Now this y, is
the difference between the two markets is the arbitrage available to the trader. The trade
is carried simultaneously at both the markets so theoretically there is no risk. (This
arbitrage should not be confused with the word arbitration, as arbitration is referred to
solving of dispute between two or more parties.)

The person who conducts and takes advantage of arbitrage in stocks, commodities,
interest rate bonds, derivative products, forex is know as an arbitrageur.

An arbitrage opportunity exists between different markets because there are different
kind of players in the market, some might be speculators, others jobbers, some market-
markets, and some might be arbitrageurs. In India there are a good amount of Arbitrage
opportunities between NCDEX, MCX in commodities.

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Gold
(Indian commodity market)


Gold is a unique asset based on few basic characteristics. First, it is primarily a monetary
asset, and partly a commodity. As much as two thirds of golds total accumulated
holdings relate to store of value considerations. Holdings in this category include the
central bank reserves, private investments, and high-cartages jewelers bought primarily in
developing countries as a vehicle for savings. Thus, gold is primarily a monetary asset.
Less than onae third of golds total accumulated holdings can be considered a
commodity, the jewelers bought in Western markets for adornment, and gold used in
industry.












The distinction between gold and commodities is important. Gold has maintained its
value in after-inflation terms over the long run, while commodities have declined.

Some analysts like to think of gold as a currency without a country. It is an
internationally recognized asset that is not dependent upon any governments promise to
pay. This is an important feature when comparing gold to conventional diversifiers like
T-bills or bonds, which unlike gold, do have counter-party risk.

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Derivatives

The term "Derivative" indicates that it has no independent value, i.e. its value is entirely
"derived". A derivative is a financial instrument, which derives its value from some other
financial price. This other financial price is called underlying. The most commonunderlying
assets include stocks, bonds, commodities, currencies, livestock, interest rates andmarket
indexes.A wheat farmer may wish to contract to sell his harvest at a future date to eliminatethe
risk of a change in prices by that date. The price for such a contract would obviouslydepend upon
the current spot price of wheat. Such a transaction could take place on a wheatforward market.
Here, the wheat forward is the derivative and wheat on the spot market isthe underlying. The
terms derivative contract, derivative product, or derivative areused interchangeably.

There are two broad types of derivatives:









F
Financial derivatives: - Here the underlying includes treasuries, bonds, stocks,
stock index,foreign exchange etc.

Commodity derivatives: Here the underlying is a commodity such as wheat,
cotton, peppers, turmeric, corn, soybeans, rice crude oil etc.



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2.2 organization details

Organizational Structure
hierarchy of key persons


























Regional Officer
Branch manager
IT
(Information
Technology)
HR
(Human
Resourc)
Back
Office
RMS
(Risk
Management
Services)
B2B B2C
Relationship
manager
Business
development
manager
Unit
manage
r
Relationship
excutive

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2.2.1Product lines


Equity
Investing in shares or stock market is inarguably the best route to long-term wealth
accumulation. However, it can also be a very risky proposition due to high risk-return trade-off
prevalent in the stock market. Hence, it is more appropriate to take help of an experienced and
trustworthy expert who will guide you as to when, where and how to invest.

Derivatives

The derivative segment is a highly lucrative market that gives investors an opportunity to earn
superlative profits (or losses) by paying a nominal amount of margin. Over past few years,
Future & Options segment has emerged as a popular medium for trading in financial markets.
Future contracts are available on Equities, Indices, Currency and Commodities.

Commodities

Commodities Derivative market has emerged as a new avenue for investors to create wealth.
Today, Commodities have evolved as the next best option after stocks and bonds for diversifying
the portfolio. Based on the fundamentals of demand and supply, Commodities form a separate
asset class offering investors, arbitrageurs and speculators immense potential to earn returns.

Life Insurance

Ensure your familys well-being by securing their future with a life insurance policy. No
financial planning is complete without life insurance. Angel offers an array of life insurance
products like Term Plans, Endowment Plans, Money back Plans, Children Life Insurance Plans
and ULIP Plans to meet your individual insurance requirements.

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Mutual Funds
Investing in a Mutual fund is an excellent way of diversifying risk as well as portfolio. Angel
presents its Mutual fund services that strive to meet all your mutual fund investment needs. We
have a wide spectrum of investment schemes from all top mutual fund houses.

Angel also provides recommendations based on in-depth research, mutual fund performance and
mutual fund ratings to help meet your investment goals.

Depository Services

Enjoy the dual benefits of trading and depository services under one roof and experience
efficient, risk-free and prompt depository service. Angel is registered as a Depository Participant
with CDSL. We are also a member of the Bombay Stock Exchange (BSE), National Stock
Exchange (NSE) and the two leading Commodity Exchanges in the countryNCDEX & MCX.
PMS

Portfolio Management Service is a highly customized service offering a range of investment
options best suited in the current market scenario. Angel offers professional Portfolio
Management Service (PMS) to HNIs who seek customized solutions to realize their investment
goals. Our Portfolio Managers are equipped to design an investment portfolio across various
investment avenues like Equities, Fixed Deposits, Bonds etc. in sync with your unique needs.

Currency Trading

The global increase in trade and foreign investments has led to inter-connection of many national
economies. This and the resulting fluctuations in exchange rates, has created a huge international
market for Forex rendering investors another exciting avenue for trading. The Forex market

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offers unmatched potential for profitable trading in any market condition or any stage of the
business cycle.

Investment Advisory

Even a seasoned investor knows that effective timing of markets is not possible. Therefore,
professional and expert advice is essential to generate superior returns from the stock market.
At Angel, we offer you investment advisory services with ternary objective of superior returns,
risk minimization and portfolio diversification. Supported by a highly specialized and dedicated
Research team, Angel follows a client-centric approach to offer customized solutions.

2.2.2 SWOT of the company


STRENGTHS

Experienced player in the market
Broad product range
Wide range of distribution network
Marketing team is proficient enough to cover various segments
Excellent image in the market
Customer Orientation
Efficient and Skilled Manpower
Excellent image in the market
Investment Advice


WEAKNESSES

Angel still could not meet the fuller customer satisfaction
There is a stiff competition from the banks

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After sale services
Software problems

OPPORTUNITIES

Ever increasing market in investment field
Emerging new technology
Unfilled needs of the customer
Education level
Untapped market
THREATS

Price war
Substitute products
Computer literacy in the prospect investors
New competitors
Technology based business












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CHAPTER-3
LITERATURE
REVIEW





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Literature Review

Investors consider factor like global economy, availability of commodity and others
things during investing in commodity and earn money by doing technical and
fundamental analysis from their brokers.

Media and friends are powerful communicating networks for expansion. It has been that,
respondents are investing their income in diversified portfolio and less risky assets. There
has been seen that coffee, wheat and cotton are more dealing commodity and investor
believe that commodity market have good opportunist market in future and most of
investor invest when there is favorable price in market. The commodity futures markets
are experiencing a good growth in the recent past.

After almost two years that commodity trading is finding favor with Indian investors and
is been seen as a separate asset class with good growth opportunities. For diversification
of portfolio beyond shares, fixed deposits and mutual funds, commodity trading offers a
good option for long-term investors and arbitrageurs and speculators. And, now, with
daily global volumes in commodity trading touching three times that of equities, trading
in commodities cannot be ignored by Indian investors.

Online commodity exchanges need to revamp certain laws governing futures in
commodities to make the markets more attractive. The national multi-commodity
exchanges have united proposed to the government that in view of the growth of the
commodities market, foreign institutional investors, too, should be given the go-ahead to
invest in commodity futures in India. (Satishkumar, 2003)




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In his study identified that a perception lies with majority of investors that future trading
fits and it is not used for other purpose like hedging. The nature of the derivatives
instruments are to reduce the risk involved in trading but in real time investors are not
taking derivatives trading for reducing their risk involved in trading and profit making is
considered to be an important factor for the them.

On the other side a number of reforms and initiatives are still needed in promoting India
as a major futures trading hub in tune to the status of being amongst the top five
producers of most of the commodities. (R.T.NirmalKumar, 2006)


Has using data's from 12 gold-mining firms from the period 1985 to 1998 with an
intention to study the effect of gold price movement toward gold mining company stock
price in Australia, A single and multi-factor market models has used to determine the
stock price movement, gold price movement and the regression relationship among them.
At the end of this research, the authors suggest that the changes in gold price have
significance effect towards stock price for gold mining company. Where 1% change in
gold price will cause 0.76% change in gold mining company stock price. (Twite, 2002)

AkthamMaghyereh and Ahmad Al-Kandari, (2007) has employed the stock market data
from Kuwait, Bahrain, Saudi Arabia and Oman on period from 1 January 1996 to 31
December 2003. In order to investigate the relationship between oil price and stock
market in Gulf Cooperation Council Country (GCC). Several test ranging from rank unit
root test, rank test for cointegration, and score statistics for nonlinear cointegration has
been done to identify the relationship between oil price and stock market indices. The
results get from traditional, linear cointegration analysis suggest that there is no linear
long run relationship between oil price and stock market. While the results gets from rank
tests suggest that a non linearcointegration relationship between GCC stock market and
oil price is discovered. Last but not least, for score statistics for nonlinear cointegration, it

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also shows that the relationship between oil price and GCC stock market is consider as
non linearcointegration. (AkthamMaghyereh and Ahmad Al-Kandari, 2007)


Has conducted a study to determine the relationship between crude oil price, stock
returns, output and interest rate in Turkey. They have used series of data like crude oil
whole sale price index, stock indices from Istanbul Stock exchange, 12 month interest
rate, and industrial production index as a tool in calculating stock return. The
methodologies employed are Variance Decomposition and Impulse Response technique.
For variance decomposition test, the results suggest that movement in oil price has the
largest effect towards stock return, follow by interest rate and industrial product. For
impulse response test, the results suggest that in initial stage, a change in oil price does
not show a significance impact for stock return in turkey, but it is significance after the
initial stage. As a conclusion, the finding from this research indicates that change in oil
price does not significantly affect stock return in Turkey. (Sari and Soytas, 2006)

Has conduct a study examining the relationships between oil prices and Gulf Cooperation
Council Country (GCC) countries' stock market in long term. In this study, the authors
has using 3 kinds of techniques namely unit root test and linear & asymmetric
cointegration testing. For the data selection, the author has used monthly data range form
year 1996 to year 2007 available from Arab Monetary Fund (AMF). In the results get
from unit root test, it shows that the oil price and stock market data are integrated with
each other. Then, for linear cointegration testing, it shows that this testing are not able to
explain the long term relationship between oil price and stock market in GCC countries.
Next, for asymmetric cointegration tests, it shows that when oil prices are increase, a
stable long run relationship is appearing between GCC's stock market.
Mohamed El Hedi and Julien (2009)


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CHAPTER-4
DATA ANALYSIS
& INTERPRETATION





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76%
24%
Gender
Male Female

(1) Gender Ratio


Male Female
76 24


















Interpretation:

According to this analysis we can know that 24% female and 76% male fill up our
questionnaire.



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(2) Which of the following will best describe your occupation?

Occupation Number of respondent
Business 54
Private sectors 16
government sectors 5
Professional 25
Total 100



Interpretation:
According to this analysis we can know about which occupation more trading in
commodity and after conclude business is more trading in commodity market.

54%
16%
5%
25%
Occupation
Business Private sectors
government sectors professional

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0% 6%
40%
51%
3%
Annual income
Below 50000 50000-100000
100000-300000 300000-600000
Above 600000
(3) What is your annual income?


Annual Income Number of respondent
Below 50000 0
50000-100000 6
100000-300000 40
300000-600000 51
Above 600000 3
Total 100















Interpretation:

According to this analysis we can conclude that more annual income of 300000-600000
with 51%.


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73%
27%
Source
Yes No
(4) Have you investing in any source?

Source
Number of respondent
Yes 73
No 27
Total 100















Interpretation:

From this analysis we can conclude that 73% customers investing in any source.





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5) Which among these investment criteria you usually prefer?

Investment Criteria Number of respondent
Bank deposites 9
Real estate 7
Stocks 11
Commodity future trading 19
Mutual fund 4
Life insurance 17
Derivative market 4
Bonds 2
Total 73




Interpretation:
According to this chart we can conclude that 19 respondent invest in commodity and 11
respondent invest in stocks.

9
7
11
19
4
17
4 2
0
5
10
15
20
Investment Criteria
Number of
respondent

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6) Are you aware of commodity market?

Aware of commodity market
Number of respondent
Yes 63
No 37
Total 100




















Interpretation:

From this analysis we can conclude that 63% customers are aware of commodity market.

63%
37%
Aware of commodity market
Yes No

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7) If yes, have you invested in commodity market?

Invested in commodity market
Number of respondent
Yes 44
No 19
Total 63















Interpretation:

From this analysis we can conclude that 44 respondent are invested in commodity
market.





44
19
0
10
20
30
40
50
Yes No
Invested in commodity
market
Number
of
responde
nt

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8) How do you come to know about commodity future trading?

Know about commodity future trading
Number of respondent
Friends 17
Agents 19
Advertisement 11
Others 16
Total 63



Interpretation:
According to this analysis 19 respondent are know about the commodity future trading
from agents.

17
19
11
16
0
2
4
6
8
10
12
14
16
18
20
Know about commodity future trading
Number of
respondent

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9) Which commodity you prefer for trading?

Prefere commodity
Number of respondent
Agro products 9
Precious metal 17
Base metals 11
Energy products 7
Total 44





Interpretation:

From this analysis we can conclude that 17 respondent are prefere for precious metal.

9
17
11
7
0
2
4
6
8
10
12
14
16
18
Agro
products
Precious
metal
Base
metals
Energy
products
Prefere commodity
Number of respondent

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9
13
12
3
0
2
4
6
8
10
12
14
Price Season Risk Return Demand
& supply
Factors trading in commodity market
Number of respondent
10) Which factor do you normally consider while trading in commodity market?

Factors trading in commodity market
Number of respondent
Price 7
Season 9
Risk 13
Return 12
Demand & supply 3
Total 44














Interpretation:

According to this analysis we can conclude that risk & return are normally affect trading
in commodity market.



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11) Commodity future market provides benefits?

Benefits
Number of respondent
Strongly agree 11
Neutral 9
Agree 17
Disagree 7
Total 44









Interpretation:

According to this analysis we can conclude that 17 respondent are agree to provide
benefits in commodity future market.


11
9
17
7
0
2
4
6
8
10
12
14
16
18
Strongly
agree
Neutral Agree Disagree
Benefits
Number of
respondent

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12) What made you not to invest in commodity future trading?


In commodity future trading
Number of respondent
Not interested 5
Lack of knowledge 3
High risk 9
High investment 2
Total 19






Interpretation:

From this analysis we can conclude that 9 respondent are not interested in commodity
market because of high risk.


5
3
9
2
0
1
2
3
4
5
6
7
8
9
10
Not
interested
Lack of
knowledge
High risk High
investment
In commodity future trading
Number of
respondent

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13) Why you are not investing in commodity market?

Not invest in commodity
Number of respondent
High risk 9
High volume 5
High investment 2
Others
3
Total 19
































Interpretation:

According to this analysis we can conclude that 9 respondent are not investing in
commodity market because of high risk.




9
5
2
3
0
1
2
3
4
5
6
7
8
9
10
Not invest in commodity
Number of
respondent

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14) Are you planning for investing &trading in commodity future market in future?

Future planning
Number of respondent
Yes 62
No 38
Total 100



















Interpretation:
According to this analysis we can conclude that 62% customers are planning for
investing &trading in commodity future market in future.


62%
38%
Future planning
Yes No

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CHAPTER-5
FINDING, SUGGESTIONS
& CONCLUSIONS





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5.1 Findings& Conclusion

63 respondent are aware about the commodity future Market

62 respondent are planning for investing &trading in commodity future market in future.

Most of the investors are not ready to invest in commodity market they feel it involve
high risk.

Most of the investors are ready to invest in commodity market if proper information is
provided.

As commodity market is new and emerging ,many investors and farmers are not fully
aware of this market .as the market helps to trade transparently without middlemen and
agents.

While finding the reasons why most of the people are nottrading in commodity market
We found that many respondents are not interested at all in this trade this is because of
lack of knowledge & high risk.

Commodity futures markets are new and emerging market. The awareness of the market
is very less among the investors who can use this trade to sell there products without the
middlemen or agents it also help the actual buyers too.

Here trader also can transfer his risk to some other who can handle it or can appetite the
risk through hedging techniques.


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Compared to capital market commodity market is less risky in volatility context here the
prices do not change within a fraction of second .significantly, minimum margin ready
physical possession, no manipulation & fraud, maximum profitability is available over
here since the commodity market helps all such as farmers, industries and individuals
investors it is growing at a faster rate in global outlook.


















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5.2 Suggestions& Recommendation

From survey it is found that most of the potential customers are concerned about the
Brokerage charges so can look upon this.

If it can charge moderate brokerage it will help to attract more and more customers.

More agents and marketing executives should be appointed to educate the customers because
the customers having many things in there mind.


Firm should approach people who are already into the business of commodities .special
campaigns / investors meets should be conducted for these people since they are aware of
rate fluctuation ,market trends etc .

They have got market idea that benefits them in price prediction.

They will be in high spirits when price risk of them will be managed.

Company can arrange seminar to educate the investor. So the the investor can invest more in
the stock market which is indirectly benefit to Angel broking.








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5.3 Learning from the project


According to this project we know about commodity market.

We know about how many respondent aware about commodity market.

After this survey we know about how many respondent interested in commodity market.

We have learn how many respondent planning for future trading.

We also know about Angel commodity products & services provided by company.

Learned the meaning of words that are mostly used in security market.

How to maintain good relations with the clients, employees.











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CHAPTER-6
BIBLIOGRAPHY












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Bibliography


News Paper :
Gold- silver price (2013, july 13), Economic times. P.n. 5

Sensex (2013, july 20), Times of india, p.n.6


Web site :
www.angelbroking.com,Introduction of angel,20 July, 2013
www.moneycontrol.comShow the commodity market, 17 july,2013
www.mcxindia.comIntroductionof MCX, 21 july, 2013
www.ncdex.comIntroduction & scenario of NCDEX, 21 July, 2013
www.commodityindia.comRecent scenario, 20 July, 2013











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CHAPTER-7
APPENDICES










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Appendices

NAME : __________________________________
AGE : __________________________________
ADDRESS : __________________________________
CONTACT NO: __________________________________


1) Which of the following will best describe your occupation?


Business government sectors
Others
Private sectors professional (please specify)


2) What is your annual income?


Below 50000 50000-100000
Above 600000
100000-300000 300000-600000


3) Have you investing in any source?



Yes No


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4) Which among these investment criteria you usually prefer?

Bank deposits Mutual fund

Real estate Life insurance

Stocks Derivative market

Commodity future trading Bonds


5) Are you aware of commodity market?

Yes No

6) If yes have you invested in commodity market?

Yes No

If No, go to question no. 12

7) How do you come to know about commodity future trading?

Friends Advertisement

Agents Others (specify)




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8) Which commodity you prefer for trading?

Agro products Base metals
(Jira, soybean) (Aluminum, nickel)

Precious metal Energy products
(Gold/silver) (Crude oil)

9) Which factor do you normally consider while trading in commodity market?

Price Risk

Demand & supply
Season Return

10) Commodity future market provides benefits?

Strongly agree Agree


Neutral disagree

11) What made you not to invest in commodity future trading?

Not interested High risk

Lack of knowledge High investment


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12) Why you are not investing in commodity market?

High risk High investment

High volume Others___________

13) Are you planning for investing &trading in commodity future market in
future?

Yes No

THANK YOU