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

WHAT IS COMMODITY MARKET?

Commodity markets are markets where raw or primary products are exchanged. It covers physical product (food, metals, electricity) markets but not the ways that services, including those of governments, nor investment nor debt, can be seen as a commodity.

WHAT IS COMMODITY FUTURES

A financial Contract The underlying commodity is bought or sold at a future date A tool used by Investors, Hedgers, Arbitragers, Day traders

COMMODITY FUTURES TRADING COMMISSION

The U.S. Commodity Futures Trading Commission (CFTC) is an independent agency of the United States government that regulates 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 more comprehensive regulatory framework for the trading of futures contracts and created the Commodity Futures Trading Commission

HISTORY
Futures contracts for agricultural commodities have been traded in the U.S. for more than 150 years and have been under Federal regulation since the 1920s.

In recent years, trading in futures contracts has expanded rapidly beyond traditional physical and agricultural commodities into a vast array of financial instruments
including foreign currencies, U.S. and foreign government securities, and U.S. and foreign stock indices.

EVOLVING MISSION AND RESPOSIBILITIES

Congress created the CFTC in 1974 as an independent agency with the mandate to regulate commodity futures and option markets in the United States In December 2000 when Congress passed the Commodity Futures Modernization Act of 2000, which instructed the Securities & Exchange Commission and the CFTC to develop a joint regulatory regime for single-stock futures, and the products subsequently began trading in November 2002. Today, the CFTC assures the economic utility of the futures markets

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.

OVER-THE-COUNTER DERIVATIVES

Brooksley Born and her chairmanship of the Commission from August 26, 1996, to June 1, 1999, was the focus of a October 2009 Frontline documentary titled "The Warning" and was also chronicled in the documentary 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 the potential for conflict with the Commodity Exchange Act (CEA) to the extent that certain OTC derivative instruments fall within the ambit of the CEA and are subject to the exclusive statutory authority of the CFTC.

PARTICIPANTS IN COMMODITIES MARKETS

Two basic types of participants in commodities markets hedgers and speculators.

Hedgers - seek to minimize & manage price risk Speculators - take on risk in the hope of making a profit.

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

Energy Futures
Commodity Crude Oil Gasoline Natural Gas Symbol CL RB NG Avg Daily Vl. 516868 93672 203934

Metal Futures
Commodity Platinum Gold Silver Copper Symbol PL GC SI HG Avg Daily Vl. 4746 104772 39505 30088

Agricultural Product Slate at NYMEX

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)

RECENT DEVELOPMENTS

Position limits on 28 physical commodity futures (and swaps) contracts. 9 agricultural contracts (such as CBOT Corn and ICE Futures U.S. Cocoa), 4 energy contracts (such as Hub Natural Gas and NYMEX NYH Gasoline Blendstock), 5 metals contracts (such as COMEX Copper and NYMEX Platinum)

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