always follow discipline in trading / investing

Always follow discipline in trading / investing

It is essential for a Sub-Broker to offer All products together while opening an account.

Equity Commodity Currency

By doing this the

Client risk is diversified with higher ROI probability with minimum risk SB has 3 avenues of revenue generation SB can collect higher margin in 3 products than a single product Consistency in revenue generation in case a client witnesses losses in one

segment, then the other two segments provide consistent revenues

What to offer a Customer and why?

Benefits of Diversified Business for SB’s

Turnover per trade is higher in commodities when compared with other segments resulting in higher revenue per client

Opportunity to hedge inter and intra segments

Helps in client retention by avoiding client moving to other service provider, if a product not on offer and increasing client shelf life

14 hours market provides more opportunities of entry and exits in a day for clients of SB’s

SB Cost VS Revenue Analysis without Commodity and Currency

Rs in thousands

SB Cost VS Revenue Analysis with Commodity and Currency

Rs in thousands

I want to trade in Commodities with

minimum risk,Can you help me???

Sure Sir.. We will guide

you in this process..

Currency

Equity

Commodity

Yes sir.. Let me take you

through a brief presentation on Commodities. .

Thanks a lot.. Can you provide me

more information

about Commodities

trading…?

What is Commodities Trading?

Buying & Selling of Commodities on Exchange platform in an organized electronic format by depositing a pre-defined margin,

to take advantage of daily price volatility..

E.g. Gold, Silver, Crude, Sugar, Soya bean etc

Exchange Traded Commodities Classification

Factors Affecting Commodity Prices

Demand-Supply situation

Government Trade Policies

Global economic situation

Currency

Geo-political tensions

Market sentiments

Investment Funds

Weather dynamics

Seasonal cycles

Benefits of Commodities Trading

•Easy to understand

•Option of physical delivery

•Linked to global markets

•14 hours of market

• Easy access to information

Other benefits of Commodities trading

Market Timings and Margin Money

Monday to Friday 10.00 am to 11.30 / 11:55 pm

Saturdays 10:00 am to 2:00 pm (only Agri commodities).

Clients participating in equity can also participate in commodities simultaneously.

In major Commodities, margin requirement is 5 – 8 %

Can Hedge Inflation with Gold

Gold prices normally move up during rising inflation as rupee depreciation results in rise in almost all commodities.

Nature of Commodities

Lot & Contract System

Lot : Minimum quantity to be purchased or sold.

Margin system : Minimum Amount to be invested.

Contract : Time period

Future date Contract system

Trading Opportunities…

Scope in Commodity futures marketPlayers Action Benefit

Farmers Follow Futures Prices Decide on croppingProducers Follow Futures Prices Decide on Production intent

Manufacturers Follow future price's Decide on manufacturing intent.Purchasers Follow Futures prices Decide on procurement intent

Farmers Sell in futures for upcoming crop Protection against price fallFarmers & Traders Sell in futures for Stored Quantity Protection against price fall

Agro LendersSell in futures for value of credit

exposure.

Protection against NPA in the event of default by borrower due to falling price of

commodityExporters Buy in futures for Export Commitment Protection against price riseImporters Sell in futures for Import commitment Protection against price fall

Domestic Producer Sell in futures for Output requirement Protection against price fall.Domestic Users Buy in futures for Input requirements Protection against price rise

Investors Invest based on cheap value.High Profit probability on value

realization.

SpeculatorsSpeculate on High Intra and Inter

Seasonal price variationHigh profit probability on right market

prediction

ArbitragersTake counter positions in Spot and

Futures and also amongst the Commodity Exchanges

Earn on price disparity in different markets

Price Discovery

Price Risk Management

Liquidity Seekers

Major Indian Commodity Exchanges

Multi Commodity Exchange (MCX)National Commodities & Derivative Exchange (NCDEX)National Multi Commodity Exchange (NMCE)Ace Derivatives & Commodity ExchangeICEXUCX

Regulatory Authority

Forward Market Commission (FMC) under the control of

Ministry of Finance

Major International Commodity Exchanges

New York Mercantile Exchange (Nymex)

Chicago Board of Trade (CBOT)

London Metal Exchange (LME)

Chicago Mercantile Exchange (CME)

Commodity Exchange (COMEX)

Tokyo Commodity Exchange (TOCOM)

Indian Share in Global Commodity Market

91%

9%

Global India

Contribution in Global landscape

Global Vs. India Global commodity has relatively long

history

India Commodity futures, though active since

19th century was banned later in 1970’s Commodity volumes surged significantly

after re-launch in 2003. MCX emerged as world's largest exchange

in silver and gold futures, second largest in copper, natural gas futures, and the third largest in crude oil futures in 2012.

Commodities Exchange Daily Turnover (in cr)

Product Specification Metal and Energy

Commodity Lot Size Rate on Screen Tick Size Profit or Loss / Tick

Gold 1 Kg Rs. / 10 Gms Rs. 1 Rs. 100

Gold Mini 100 Gms Rs. / 10 Gms Rs. 1 Rs. 10

Silver 30 Kg Rs. / Kg Rs. 1 Rs. 30

Silver Mini 5 Kg Rs. / Kg Rs. 1 Rs. 5

Silver Micro 1 Kg Rs. / Kg Rs. 1 Rs. 1

Copper 1 MT Rs. / Kg Rs. 0.05 Rs. 50

Crude oil 100 BBL Rs. / BBL Rs. 1 Rs. 100

Lead 5 MT Rs. / Kg Rs. 0.05 Rs. 250

Aluminum 5MT Rs. / Kg Rs. 0.05 Rs. 250

Zinc 5MT Rs. / Kg Rs. 0.05 Rs. 250

Natural Gas 1250 mmbtu Rs. / 1mmbtu Rs. 0.10 Rs. 125

Nickel 250Kg Rs. / Kg Rs. 0.10 Rs. 25

Product Specification Agri Commodities

Commodity Lot Size Rate on Screen Tick Size Profit or Loss / Tick

Soya bean 10 MT Rs. / Quintal Rs.0.50 Rs. 50

Refined soya oil 10 MT Rs. / Kg Rs.0.05 Rs. 50

RM seed 10 MT Rs. / Quintal Rs. 1 Rs. 100

Chana 10 MT Rs. / Quintal Rs.1 Rs. 100

Maize 10 MT Rs. / Quintal Rs. 1 Rs. 100

Wheat 10 MT Rs. / Quintal Rs. 1 Rs. 100

Guarseed 1 MT Rs. / Quintal Rs. 10 Rs. 100

Pepper 1 MT Rs. / Quintal Rs. 5 Rs. 50

Turmeric 5 MT Rs. / Quintal Rs. 2 Rs. 100

Jeera 3 MT Rs. / Quintal Rs. 2.5 Rs. 75

Sugar 10 MT Rs. / Quintal Rs. 1 Rs. 100

Potato 10 MT Rs. / Quintal Rs. 1 Rs. 100

Risk and Return of Commodity Futures

Hedge against inflation, offering diversification in a portfolio. Value chain participants can lock in a price using commodity derivatives, to manage their commodity price

risk.

Commodities offer advantages in the longer term horizon.

Historically, commodities have exceeded returns than stocks.

Ris

k

Indian Gold Prices v/s Rupee

Buy MCX Gold December contract between 29000 – 29200, SL - 28400, Target – 30500

27,561

30,311

32,326

30,424

25,375

27,677

34,439

50.2

57.1

51.754.2

60.7

59.0

68.8

48.5

53.5

58.5

63.5

68.5

25000260002700028000290003000031000320003300034000

MCX Gold v/s Spot Rupee

MCX Gold (Rs./10 gms) Spot Rupee

MCX GoldSpot Rupee

10 Years Gold & Silver price fluctuation

F&O and Commodities Strategy

F & O Commodity F & O Commodity1 lots Nifty buy 1 lots GoldM Buy 5 lots Nifty buy 5 lots GoldM Buy25000 (Margin) 14000 (Margin) 125000 70000

Case 1 Case 1Nifty Goes UP Gold M Falls Marginally Nifty Goes UP Gold M Falls Marginally

Profit Marginal Loss Profit Marginal LossCase 2 Case 2

Nifty Goes Down Gold M will Go UP Nifty Goes Down Gold M will Go UPLoss Profit Loss Profit

• 1 lot Nifty : 3,00,000 contract value needs to be hedged with equal amount of Gold by taking same position, I.e. 100 grams gold with contract value of 2,95,000/-. Equal value of Currency can also be hedged in the same way (for 1 lot gold mini worth Rs. 3 lacs approx 5 lots of USDINR).

Double on SL Strategy

Commodity Qty / lots Risk per lot Reward per lot Result Profit / Loss

Silver M / Gold M 1 500 1000 SL triggered -500



Silver M / Gold M 8 500 1000 Target 8000










Result 37 SL = 9, Target = 4 Result = 11500 profit

Gold special call strategyTerms of strategy : Daily 3 calls on Gold at 10:30 am, 3:30 pm and 7:30

pm. Risk reward ratio of 1 : 2.5 (30-35 Rs. SL and 75 to 85

Rs target)

Probable results per dayTiming 1 2 3 4

10:30 AM SL SL SL Target -3000 -3000 -3000 7500

3:30 PM SL SL Target Target -3000 -3000 7500 7500

7:30 PM SL Target Target Target -3000 7500 7500 7500

Total Profit / Loss -9000 1500 12000 22500

Gold special call strategyGuidelines for clients who intend to take this facility:

• Calls will be sent only on mobile phones in the form of SMS.

• Clients are advised to maintain strict SL and Targets advised as per call with no modification in risk reward ratio.

• Quantity / lots should be same for all 3 calls during the day.

• Participation in all 3 calls is recommended.

• No carry forward of position is advised. Every position initiated must be cleared before the next call timing.

• Client is solely responsible for all the Profits / losses arriving from this type of trading.

• No PMS to be allowed.

Trading strategy for Nifty and Gold combo

Nifty / Gold Strategy

Nifty Gold

1 lot Nifty buy 1 Lot Gold Mini buy

1 lot Nifty Sell 1 lot Gold mini Sell

• This strategy helps the client to minimize his risk, as • if client buys 1 lot Nifty (approx 3 lac contract value), and if rupee depreciates the Nifty falls and client starts loosing money, the losses to a large extent can be covered by taking a buy position in 1 lot Gold mini (approx 3 lac contract value) as Gold prices move up on rupee depreciation and vise versa for a sell position in Nifty.

Type of Charges (Cost per crore) MCX Commodity Segment NCDEX Commodity Segment

Exchange Transaction Fee (In Rs.) 150

250

Commodity transaction tax (CTT)* In Rs. 500

500

Stamp Duty * (Maharashtra) (In Rs.) 100 100

Service Tax at 12.36% (In Rs.) 266 278

Total Levies 1016 1128

Brokerage Per cr 2000 2000

Total Cost (In Rs.) 3016 3128

Segment wise cost per crore

* The CTT is applicable on sell side at 0.01% for all metal, base metal, energy and Processed agriculture commodities. It is NOT applicable on other than processed commodities like Chana, Soya bean, Jeera, Pepper, Turmeric, Guarseed, Potato, cardamom, etc…* The stamp duty is applicable as per respective state norms.

Process of Delivery at Exchange Client who wish to give/take delivery at exchange have to submit Delivery Request to “Angel”

within stipulated time line as per contract nature.

Deposit of commodity in “Angel” A/c at WH before giving Intention request.

Transfer of Original Warehouse Receipts (WHR) and Quality certificates (Q.C) to CSO before two days of giving of Intention request.

Deposit margins as per Angel’s policy for delivery trade.

CSO will mark buyer/ seller delivery request at exchange as per intention and delivery (WHR) received from customer.

Allocation of delivery to buyer on base or default location. Even in case it does not match with preferred location, such buyer will be bound to take delivery.

Rejecting of delivery request will happen under the following circumstances:

(i) Non availability of open position.

(ii) Non-receipt of delivery Intention request within specific time frame.

(iii) Non-receipt of funds / Commodities

Compulsory Delivery Settlement Process: Deposit of Commodity at warehouse (Before placing intention)

Submission of delivery intention letter (T-2 day)

Delivery Marking to the Exchange (T day)

Settlement of commodity pay-in (T+2 day)

Settlement of Fund Pay-out (T+2 day)

Settlement of Quality Premium/Discount (T+3 day)

Settlement of Excess/ short quantity / Close out Qty (T+3 day)

Settlement of VAT / Sales tax (T+5 day)

Settlement of Invoice (T+7 day)

Lifting of Delivery from Warehouse (As per client’s requirement)

3 Phases of Client AcquisitionPhase 1 :- Near & Dears Market1. Family, Friends, Colleagues etc can be easily targeted.2. Explain about the new venture by meeting & mailers.3. Cross sell all products.4. The list should be more then 250 peoples & should be exhausted in 3 months period.

Phase 2 :- Refernces Market1. Customer Satisfaction leads to references of new clients by the way of Good service,

Timely execution etc. 2. Arrange for regular meetings, seminars, Events with ANGEL’s support.3. These references will boost for next 3 months.

Phase 3 :- Direct Sales1. Recruit & Training of Sales Team2. References leads can be given to them3. Business Development by the ways of like Canopy Activities at nearby Malls, ATM’s, Big

Complexes etc. Distributing Marketing Materials etc.4. Various Lead generation Activities can be carried out.

Angel Commodities Research

Fundamental – Daily, Weekly, Monthly

•Daily - Metals and Energy Report•Daily – Agri Commodities •Daily Evening Report – Metals and Energy•Weekly Tracker •Monthly – Agri Commodities Report•Monthly – Bullion, Base Metals and Energy

Fundamental Special Reports

•RBI policy review•ECB update•FOMC update•Diwali Bullion Report•Seasonal Agri Reports•MSP update•Advance estimates update•Monsoon Report•Sowing progress Report•High impact US economic data

Technical – Daily, Weekly, Monthly

•Daily – Agri Tech, Metal and Energy Tech and Currency •Weekly Tracker – Agri, Non-Agri and Currencies

Technical Special Reports

•Agri Technical Report•Non-Agri Technical Report•Currency Technical Report•Spread Tracker•Special Festival Report (Akshaya Tritiya, Diwali)

Knowledge Series – Annually

About Angel Commodities Broking Pvt Ltd

• Leaders in Commodity Retail broking business.• UTV Bloomberg Award (Broker with best Commodity

Research of the year) (2011 & 2012)• ZEE business award Best Technical Award (2010)• Frequent Edu-camps, Seminars & Awareness programs• In depth research support.• All in one software and Mobile trading platform• Relationship Management.

Published in FY 2013. © Angel Broking 2013-14

Angel Broking All rights reserved. Corporate Office: 6th Floor, Ackruti Star, Central Road, MIDC, Andheri (East), Mumbai – 400 093, IndiaTel.: +(91) 022 3935 7600

The information given herein or in the accompanying material is intended only to be general information relating to the organization, structure, functions, areas of business, potential and scope of Angel Group of companies, which expression may as the context requires include the holding company, subsidiary companies and their affiliates, or any or all of them, variously referred to as “Angel Broking”, “Angel Group”, “Angel” or the “Group” or the “Company” and while every effort has been made to ensure the accuracy and completeness of the information given, neither the group companies, nor any of their Directors, Members, employees, servants or agents make any guarantee or assume any liability for any errors or omissions in the information furnished. It is further made clear that nothing stated or anything omitted to be stated in this document can constitute a ground for any claim, demand or cause of action against the company or any of its Directors, Members, employees, servants or agents.

Thank You

always follow discipline in trading / investing

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