commodity dealer certificatioin

Certified Commodity Dealer

VS-1093


www.vskills.in

Certified Certified Certified Certified Commodity DealerCommodity DealerCommodity DealerCommodity Dealer

Certificate Code VSCertificate Code VSCertificate Code VSCertificate Code VS----1010101093939393

Vskills Certified Commodity Dealer is for beginner’s pursuing career in commodities

market. The course focuses on imparting the necessary domain knowledge to acquaint the

candidate with the operations and functionalities of commodities and derivative market in

India. Commodity markets have a significant growth potential with the ability to benefit

from rapid Indian economic growth, government initiatives and widening market

participation.

Why should one take this certification?Why should one take this certification?Why should one take this certification?Why should one take this certification?

The certification provides an understanding of commodity market and practical aspects of

commodities trading. The certification gives a visible recognition for your knowledge and is

also beneficial for working professionals and people looking for a new job or promotion or

simply more responsibility. The certification works as an added qualification on your CV

and significantly improves your chances of getting the desired role.

Who will benefit from taking this cerWho will benefit from taking this cerWho will benefit from taking this cerWho will benefit from taking this certification?tification?tification?tification?

The certification is beneficial for traders, research analysts, dealers, investors, treasury

managers as well as students looking forward for a career in this sector.

Test Details:Test Details:Test Details:Test Details:

� Duration:Duration:Duration:Duration: 60 minutes

� No. of questions:No. of questions:No. of questions:No. of questions: 50

� Maximum marks:Maximum marks:Maximum marks:Maximum marks: 50, Passing marks: 25 (50%);

There is no negative marking in this module.

Fee Structure:Fee Structure:Fee Structure:Fee Structure:

Rs. 4,000/- (Includes all taxes)


www.vskills.in

Companies that hire Vskills Certified Companies that hire Vskills Certified Companies that hire Vskills Certified Companies that hire Vskills Certified Commodity Dealer Commodity Dealer Commodity Dealer Commodity Dealer

Vskills Certified Commodity Dealer can look forward for rewarding career opportunities

with commodities exchanges, retail firms, banks, mutual funds, broking firms, FMCG

companies etc. The required skills may vary for each area but candidate must possess

sound fundamental knowledge, skills to analyze and examine market and make necessary

reports together with presentation skills.


www.vskills.in

Table of ContentTable of ContentTable of ContentTable of Content

1. 1. 1. 1. InInInIntroduction to Commodity Marketstroduction to Commodity Marketstroduction to Commodity Marketstroduction to Commodity Markets

1.1 Commodity Exchanges in India

1.2 Global Commodity Markets

1.3 History of Commodity Derivatives in India

1.4 Policy Initiatives

1.5 Structure of the Indian Commodity Market

1.6 Parties of a Commodity Exchange & Trading

1.7 Latest Development

1.8 Benefits of Commodity Markets

2. 2. 2. 2. Commodity Exchange MarketsCommodity Exchange MarketsCommodity Exchange MarketsCommodity Exchange Markets

2.1 The Role of Commodity Exchanges

2.2 List of Commodity Exchanges in India

2.3 Types of Commodities Traded in India

2.4 Active Commodities & Contracts on MCX

2.5 Active Commodities & Contracts on the NCDEX

3. 3. 3. 3. Segments in Commodity MarketsSegments in Commodity MarketsSegments in Commodity MarketsSegments in Commodity Markets

3.1 OTC Markets

3.2 Exchange Traded Commodities

3.3 Spot Markets

3.4 Difference between Spot Vs Forward Transaction

3.5 Exchange traded VS OTC

4. 4. 4. 4. DerivativesDerivativesDerivativesDerivatives

4.1 Products

4.2 Functions

4.3 Clearing and Settlement System


www.vskills.in

4.4 Participants

4.5 Types of Derivatives Markets

5. 5. 5. 5. CommCommCommCommodity and Financial Derivativesodity and Financial Derivativesodity and Financial Derivativesodity and Financial Derivatives

5.1 Physical settlement

5.2 Delivery & Assignment

5.3 Warehousing

5.4 Forward Contracts

5.5 Introduction to Futures

5.6 Pricing Commodity Futures

5.7 Using Commodity Futures

6. 6. 6. 6. Hedging Hedging Hedging Hedging and Speculationand Speculationand Speculationand Speculation

6.1 Methods of Hedging

6.2 Short Hedge

6.3 Long Hedge

6.4 Hedge Ratio

6.5 Advantages and Disadvantages of Hedging

6.6 Speculation: Bullish Commodity, Buy Futures

6.7 Advantages and Disadvantages of Speculation

7. 7. 7. 7. Introduction to OptionsIntroduction to OptionsIntroduction to OptionsIntroduction to Options

7.1 Difference between Futures and Options

7.2 Option Terminology

7.3 Types of Market Analysis

8. 8. 8. 8. TradingTradingTradingTrading

8.1 Futures Trading System

8.2 Entities in the Trading System

8.3 Commodity Futures Trading Cycle

8.4 Order Types and Trading Parameters

8.5 Order Entry on the Trading System


www.vskills.in

8.6 Margins for Trading in Futures

8.7 Charges

8.8 Hedge Limits

9. 9. 9. 9. Clearing and SettlementClearing and SettlementClearing and SettlementClearing and Settlement

9.1 Clearing

9.1 Settlement

9.2 Warehousing

9.3 Indicative Warehouse Charges of NCDEX

10. 10. 10. 10. WarehousingWarehousingWarehousingWarehousing

10.1 Warehousing and commodity exchange

10.2 Quality of assets and functions

10.3 Role of an approved Registrar & Transfer agent and Assayer

10.4 Indicative warehouse charges

11111111. . . . RRRRisk Management & Marginingisk Management & Marginingisk Management & Marginingisk Management & Margining

11.1 Calculating Initial Margin

11112222. . . . Electronic Spot ExchangeElectronic Spot ExchangeElectronic Spot ExchangeElectronic Spot Exchange

12.1 Need for electronic Spot exchange

12.2 NCDEX Spot Exchange Ltd (NSPOT)

12.3 National Spot Exchange Ltd (NSEL)

12.4 Constitution

12.5 Trading

12.6 Membership

12.7 Advantages

11113333. . . . Regulatory FrameworkRegulatory FrameworkRegulatory FrameworkRegulatory Framework

13.1 Rules Governing commodity derivatives exchanges / participants

13.2 Rules Governing Trading & Clearing on the Exchange

13.3 Rules Governing Investor Grievances, Arbitration

13.4 Implications of VAT


www.vskills.in

Course OutlineCourse OutlineCourse OutlineCourse Outline

1. Introduction to Commodity Markets1. Introduction to Commodity Markets1. Introduction to Commodity Markets1. Introduction to Commodity Markets

1.1 Explains the role of commodity exchanges in India

1.2 Discusses the global commodity markets across the world and their emergence

1.3 Discusses the evolution of commodity markets in BRIC Nations

1.4 Discusses the history of commodity derivatives in India

1.5 Discusses the various policy initiatives regulating forward contracts in commodities all

over India

1.6 Describes the structure of the Indian commodity market and their roles respectively

1.7 Describes the role of various players in the commodity exchange & trading system

1.8 Discusses the future prospects, growth and latest development in the commodity

exchange market in India

1.9 Explains the benefits of commodity markets in India

2. Commodity Exchange 2. Commodity Exchange 2. Commodity Exchange 2. Commodity Exchange

2.1 Discusses the role of commodity exchanges in India facilitating trade

2.2 Describes the chief commodity exchanges in India – NCDEX, MCX, NMCEIL, ICEX

2.3 Discusses various types of commodities traded in India and their categorization

2.4 Discusses the active commodities and contracts on MCX and NCDEX

3. Segments in Commodity Markets3. Segments in Commodity Markets3. Segments in Commodity Markets3. Segments in Commodity Markets

3.1 Explains the role of OTC markets and their functioning

3.2 Discusses the various exchange traded commodities

3.3 Discusses the functioning of spot markets, difference between spot & Forward

transaction and exchange traded and OTC

4. Derivatives4. Derivatives4. Derivatives4. Derivatives

4.1 Explains the meaning of derivatives and their function

4.2 Discusses the various products and instruments categorized as derivatives


www.vskills.in

4.3 Discusses the functions and benefits of derivatives

4.4 Describes the role of the various participants trading in the derivatives market

4.5 Discusses the types of derivatives markets - Financial and Commodity derivative

market

4.6 Difference between commodity and financial derivatives on the basis of physical

settlement, delivery & assignment, warehousing etc.

5. Commodity Derivatives5. Commodity Derivatives5. Commodity Derivatives5. Commodity Derivatives

5.1 Explains the role and features of forward contracts

5.2 Discusses the limitation of forward market and contracts

5.3 Explain futures and standard features of future contracts

5.4 Explains the differences between future and forward contracts

5.5 Illustrates the various terminologies used in future contracts

5.6 Discusses the difference between investment assets and consumption assets

5.7 Discusses the process of pricing commodity futures

5.8 Discusses the process and features of pooling and bootstrapping

5.9 Discusses the Cost of Carry Model

5.10 Discusses the process of pricing future contracts on investment and consumption

commodities

5.11 Explains the various methods of using commodity futures

6. Hedgin6. Hedgin6. Hedgin6. Hedging g g g , , , , SpeculationSpeculationSpeculationSpeculation and Arbitrage and Arbitrage and Arbitrage and Arbitrage

6.1 Explains the purpose, methods of hedging

6.2 Explains the meaning, purpose and benefits of short hedge and long hedge

6.3 Discusses the mechanism of hedge ratio

6.4 Discusses the advantages and limitations of hedging

6.5 Discusses advantages and disadvantages of hedging

6.6 Explains the meaning of speculation and optimal speculation strategies

6.7 Discusses the advantages and disadvantages of speculation

6.8 Discusses the concept of arbitrage and mechanism to implement arbitrage theory


www.vskills.in

7. Options7. Options7. Options7. Options

7.1 Describes the concept of option and various option terminologies

7.2 Discusses the difference between futures and options

7.3 Discusses the different approached used to perform market analysis – Technical,

fundamental, quantitative and sentimental analysis

8. Trading8. Trading8. Trading8. Trading

8.1 Discusses the functionalities of futures trading system

8.2 Discusses the various entities involved in the trading system such as TCM, PCM,

STCM

8.3 Discusses the guidelines outlined for the allotment of client code

8.4 Explains the commodity futures trading cycle

8.5 Discusses the different order types and the required conditions or trading parameters

to be fulfilled to enter trading system

8.6 Explains the meaning of each order entry on the trading system and their functionalities

8.7 Explains the process of placing order, maintaining order books and understanding net

position

8.8 Explains the margins for trading in futures and the types of margins applicable to future

trading in commodities

8.9 Discusses the various charges involved in trading through exchange such as

transactional charges, collection, due date charges etc

8.10 Explains the hedging policy and the assignment of hedge limits and the prescribed

conditions

9. Clearing and Settlement9. Clearing and Settlement9. Clearing and Settlement9. Clearing and Settlement

9.1 Explains the three components involved in commodities exchange – Trading, clearing

and settlement

9.2 Explains the process of clearing, role of clearing houses, mechanism of clearing, need

of clearing banks and functions of depository participants

9.3 Explains the process of settlement, types of settlement, different types of settlement

price, settlement mechanism and methods of settlement


www.vskills.in

10. Warehousing10. Warehousing10. Warehousing10. Warehousing

10.1 Explains the concept of warehousing in terms of commodity exchange, applicable

guideline

10.2 Discusses the quality of underlying assets and functions of a warehouse

10.3 Explains the role of an approved Registrar & Transfer agent and approved Assayer

10.4 Discusses the indicative warehouse charges of NCDEX

11111111. R. R. R. Risk Management & Marginingisk Management & Marginingisk Management & Marginingisk Management & Margining

10.5 Explains the mechanism of managing risk in future market

10.6 Discusses the regulations and procedures for margins and limits applicable to

members and their clients

10.7 Discusses the computations of initial margins using SPAN system

10.8 Illustrates the implementation aspect of margining and risk management

10.9 Explains the effect of violation

12121212. Electronic Spot Exchange. Electronic Spot Exchange. Electronic Spot Exchange. Electronic Spot Exchange

12.1 Discusses the need for electronic spot exchange

12.2 Discusses the role and constitution of NCDEX Spot Exchange Ltd (NSPOT)

12.3 Discusses the role and constitution of National Spot Exchange Ltd (NSEL)

12.4 Explains the process of trading, functionalities of the trading platform and the

memberships offered

12.5 Illustrates the advantages of Electronic Spot Exchange to farmers, traders, arbitrageurs

and future exchanges

13.13.13.13. Regulatory Framework Regulatory Framework Regulatory Framework Regulatory Framework

13.1 Discusses the rules governing commodity derivatives exchanges / participants

13.2 Discusses the rules governing trading & clearing on the exchange

13.3 Discusses the rules governing investor grievances, arbitration

13.4 Discusses the implication of VAT such as settlement on account of VAT, raising

invoice


www.vskills.in

Sample QuestionsSample QuestionsSample QuestionsSample Questions

1. An appreciation of the Rupee relative 1. An appreciation of the Rupee relative 1. An appreciation of the Rupee relative 1. An appreciation of the Rupee relative to the US Dollar would be expected to to the US Dollar would be expected to to the US Dollar would be expected to to the US Dollar would be expected to

have which of the following effects?have which of the following effects?have which of the following effects?have which of the following effects?

A. Increase US exports to India

B. Increase US imports from India

C. Raise the cost to Americans for Indian imports

D. Create Balance of Payments surplus for India

2. Which of the s2. Which of the s2. Which of the s2. Which of the systems occurred first in the history of international ystems occurred first in the history of international ystems occurred first in the history of international ystems occurred first in the history of international bbbbanking ?anking ?anking ?anking ?

A. Post Bretton Woods

B. European Monetary Union

C. Gold Standard

D. Gold Exchange Standard

3. When Americans or foreigners expect the return on _____ deposits to be high3. When Americans or foreigners expect the return on _____ deposits to be high3. When Americans or foreigners expect the return on _____ deposits to be high3. When Americans or foreigners expect the return on _____ deposits to be high

relative to the returelative to the returelative to the returelative to the return on _____ deposits, there is a higher demand for dollar rn on _____ deposits, there is a higher demand for dollar rn on _____ deposits, there is a higher demand for dollar rn on _____ deposits, there is a higher demand for dollar

depositsdepositsdepositsdeposits and a correspondingly lower demand for foreign depositsand a correspondingly lower demand for foreign depositsand a correspondingly lower demand for foreign depositsand a correspondingly lower demand for foreign deposits....

A. dollar; dollar

B. dollar; foreign

C. foreign; dollar

D. foreign; foreign

4. If the French demand for American exports rises at th4. If the French demand for American exports rises at th4. If the French demand for American exports rises at th4. If the French demand for American exports rises at the same time that U.S.e same time that U.S.e same time that U.S.e same time that U.S.

productivity rises relative to French productivity, then, in the long run,productivity rises relative to French productivity, then, in the long run,productivity rises relative to French productivity, then, in the long run,productivity rises relative to French productivity, then, in the long run,

A. the euro should appreciate relative to the dollar

B. the dollar should depreciate relative to the euro

C. the dollar should appreciate relative to the euro

D. it is not clear whether the euro should appreciate or depreciate relative

to the dollar.


www.vskills.in

5. If portable disk players made in China are imported into the United States, the 5. If portable disk players made in China are imported into the United States, the 5. If portable disk players made in China are imported into the United States, the 5. If portable disk players made in China are imported into the United States, the

Chinese manufacturer is paid inChinese manufacturer is paid inChinese manufacturer is paid inChinese manufacturer is paid in

A. Dollars

B. Chinese Yuan

C. Euros or some third currency

D. International monetary credits

Answer: 1 (C), 2 (C), 3 (B), 4 (C), 5 (B)Answer: 1 (C), 2 (C), 3 (B), 4 (C), 5 (B)Answer: 1 (C), 2 (C), 3 (B), 4 (C), 5 (B)Answer: 1 (C), 2 (C), 3 (B), 4 (C), 5 (B)


www.vskills.in

commodity dealer certificatioin

Education