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Trade in Commodity Futures

Why should we trade in commodity or what can be benefited in trading in commodity?

Big market - diverse opportunities
The listed commodities include Bullion, Metals, Energy and Agri products, trading in commodities provides a lucrative market opportunity for investors, arbitragers, hedgers, traders, manufacturers, exporters and importers.

Huge potential !
Commodity Exchange witnesses a substantial daily turnover, unlocking a huge potential for the participants to earn profits.

Exploitable fundamentals
Commodity trading operates on a simple principle - “Price is a function of Demand and Supply”. This makes things really easy to understand and exploit.

Portfolio diversifier
Commodity Futures derive their prices from the underlying commodity and commodity prices cannot come down to zero. Commodity has a global presence and hence, it's a good portfolio diversifier.

Extended trading hours
Indian commodity market operates works 14 hours a day covering timings of all major international commodity exchanges, thus giving traders sufficient time to earn profits.

Option of trading in Demat form
Now, no one does not need to hold commodities physically in warehouses. Now-a-days depositories offer to hold your commodities in a Demat form.

What are the Advantages of Commodity futures?
A Futures trading eases the hassles and costs of settlements and storage for traders who do not want custody. The most lucrative element of futures trading is that it allows investors to participate and trade at nominal costs.

Traders no longer need to put the whole amount for trading; only the margin is required.

Traders can short sell and profit from falling prices.

Highly process driven, diligent approach

Powerful Research & Analysis

One of the “best-in-class” dealing rooms

How do we assist in making the trading easier and better?

  • Assistance
  • Dedicated Relationship Managers
  • Dedicated Dealers for facilitating trading and post trade needs

Our Value Adds

  1. Access to all your accounts through your Unique Client Code(UCC).
  2. Access your ledger balances and account information over internet and at the branch Help Desk
  3. Browser and application based platforms can also be made available for commodity trading
  4. SMS services for research advice and to keep you abreast with your investments
  5. Regular News and Updates on market

Spot Exchange

Trading on Spot Exchange platform is the trading of an actual physical commodity at the current market price. Current delivery price of a commodity traded in the spot market, comply with the price in which goods are sold for cash and delivered immediately through the spot exchange platform. This platform provides customized services relating to storage, procurement and disposal of commodities through online trading system.

National Spot Exchange Ltd.( NSEL)

What the Spot Exchanges can provide?

  • Enable better price realization for the farmers, Traders & other participants.
  • Enable lower cost of purchase for buyers.
  • Involves a larger number of participants from around the country – enabling both the farmers and the end users to reach more people – thus effecting a better bargain for both.
  • Larger number of participants would also ensure higher liquidity
  • Removing/minimizing the chain of intermediaries, which are mainly responsible for the price aberration. This can have an indirect effect on the reduction in the price of the commodity that the ultimate consumers pay.
  • Reducing/eliminating the dependency of farmers on middlemen for selling their product.
  • Evolving a transparent and efficient system of trading through electronic system leading to fair price discovery – an efficient system would erase any sort of manipulation.
  • Making the entire operation fast and easy for both farmers and buyers.

How to Trade?

  1. In simple words, one can buy / sell the Commodity from the Spot platform.
  2. You must have a trading account with us.
  3. You must have a valid sales-tax registration (for Delivery) but in case the client do not have a sales-tax number; one can take the help of Our Platform.

The process

  1. Farmer/Seller bring his goods to the warehouse
  2. The stocks are assayed – Quality checked and the goods weighed
  3. If the quality is validated, the warehouse receipt is issued
  4. The seller goes to the designated Spot Exchange member with the receipt and a limit is opened for the quantity to be traded on the Exchange
  5. Once the transactions are completed at the mutually agreed price between buyer and seller, the delivery and settlement aspects are done as per rules of the Exchanges.

Benefit

  1. Access to larger number of buyers throughout the country: thus increasing not only his reach but also his bargaining power. The farmer won’t be at the mercy of a few influential traders in the locality
  2. Accurate, transparent, online information of prices: without risks of manipulation
  3. Increased trade: The Spot Exchanges will ensure assurance of a standard quality for the buyer. It will help generate interest for big players like Corporate, exporters, who would be interested more in the quality aspects. Delivery assurance to buyers can attract bigger players into the market as there will be no counter party risk in the trading system. Possibility of huge volumes of trade can also be a positive factor for the large players
  4. Better storage and handling system: will cut damage costs especially for perishable items
  5. Arbitrage opportunities: as farmers can benefit from trades in the same commodity on both the spot and the futures market
  6. Improved Technology: can help the farmer to expect that the deals would be completed and he will get his payments fast

Some FAQs

Who Can be a participant?

  1. Trader
  2. User Industry
  3. Retail Chains
  4. Super Markets
  5. SMEs

What kinds of commodities are available for trading?

  1. Agri Commodities: Agri commodity includes Chana, Guarseed, Urad, Lemon Tur and many more commodities
  2. Bullions: Bullion includes gold and silver
  3. Energy- Crude Oil, Natural Gas.

Trading Criteria?

  1. Buyer: Has to pay Trading margin just for intraday trading. For delivery full payment for the commodity has to be made if the client wants to take delivery.
  2. Seller: Seller has to deposit commodity in advance (Short selling is not allowed), need not to pay any margin for selling.

Currency Futures
Now, experience the world's most traded financial instrument with Sri Sairam Group.

Benefits of Currency Futures

  1. High Liquidity
  2. Extended trading hours - 9 am to 5 pm
  3. Opportunities to reap benefits owing to a highly dynamic market
  4. Small lot size of only US $1000 with low exchange specified margins

Currency Futures is best suited for -

  1. SMEs / Individuals involved in Imports/Exports
  2. Corporate/ Institutions involved in Imports/Exports and anybody else who has foreign currency exposure

How do I open a Trading and Demat account with Sri Sairam Groups?

You can open a trading and Demat account with us by simply filling in the online application form provided and sending back the printed version to us. Please make sure to read the instructions carefully and send with it all the required documents before mailing in your application to 7/1 B Sai Chambers Gandhi Bazaar Main Road Basavanagudi Bangalore-560004, Phone- 080-41229695, Fax no :-08026620088

How do I trade in Sri Sairam Groups?

Trading online with Sri Sairam is done by the NSE NOW trading platform. NSE NOW is available for easy use in two modes. You can download the NSE NOW platform and install it directly onto your computer to begin hassle free trading without worrying about slow and unreliable internet connections. You can also choose to trade online using the NSE NOW Express online platform.

How do I carry out technical analysis?

NSE TAME enables you to carry out technical analysis for your trades through advanced analytical graphs and charts. You can access NSE TAME using your NSE NOW User ID and password.

Where can I find details regarding Sri Sairam's pricing model?

Our pricing model is explained in easy to follow fashion in our pricing section.

Is there a minimum amount required for opening a Sri Sairam account?

No. There is no minimum amount required to open a Sri Sairam account

What if my question is not answered above?

If you still have more questions, please contact us by mailing to email-id info@srisairamgroups.com or please feel free to call us on 080-41229695, 41506620

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
Overview

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.

Sri Sairam Groups with its membership as Trading and Clearing Member of NSE F&O Segment and Trading Member of NSE CM provides you a gateway to the exciting world of derivative market.

  1. What are Derivatives?

    The term "Derivative" indicates that it has no independent value, i.e. its value is entirely "derived" from the value of the underlying asset. The underlying asset can be Securities, Commodities, Bullion and Currency, Livestock or anything else. In other words, Derivative means a forward, future, option or any other hybrid contract of pre determined fixed duration, linked for the purpose of contract fulfillment to the value of a specified real or financial asset or to an index of securities.
    With Securities Laws (Second Amendment) Act,1999, Derivatives has been included in the definition of Securities. The term Derivative has been defined in Securities Contracts (Regulations) Act, as:- •a security derived from a debt instrument, share, loan, whether secured or unsecured, risk instrument or contract for differences or any other form of security; •a contract which derives its value from the prices, or index of prices, of underlying securities.

  2. What is a Futures Contract?

    Futures Contract means a legally binding agreement to buy or sell the underlying security on a future date. Future contracts are the organized/standardized contracts in terms of quantity, quality (in case of commodities), delivery time and place for settlement on any date in future. The contract expires on a pre-specified date which is called the expiry date of the contract. On expiry, futures can be settled by delivery of the underlying asset or cash. Cash settlement enables the settlement of obligations arising out of the future/option contract in cash.

  3. What is an Option Contract?

    Option Contract is a type of Derivatives Contract which gives the buyer/holder of the contract the right (but not the obligation) to buy/sell the underlying asset at a predetermined price within or at end of a specified period. The buyer/holder of the option purchases the right from the seller/writer for a consideration which is called the premium. The seller/writer of an option is obligated to settle the option as per the terms of the contract when the buyer/holder exercises his right. The underlying asset could include securities, an index of prices of securities etc.

    Under Securities Contracts (Regulations) Act,1956 options on securities has been defined as "option in securities" means a contract for the purchase or sale of a right to buy or sell, or a right to buy and sell, securities in future, and includes a teji, a mandi, a teji mandi, a galli, a put, a call or a put and call in securities.

    An Option to buy is called Call option and option to sell is called Put option. Further, if an option that is exercisable on or before the expiry date is called American option and one that is exercisable only on expiry date, is called European option. The price at which the option is to be exercised is called Strike price or Exercise price.

    Therefore, in the case of American options the buyer has the right to exercise the option at anytime on or before the expiry date. This request for exercise is submitted to the Exchange, which randomly assigns the exercise request to the sellers of the options, who are obligated to settle the terms of the contract within a specified time frame.

    As in the case of futures contracts, option contracts can be also be settled by delivery of the underlying asset or cash. However, unlike futures cash settlement in option contract entails paying/receiving the difference between the strikes price/exercise price and the price of the underlying asset either at the time of expiry of the contract or at the time of exercise / assignment of the option contract.

  4. What are Index Futures and Index Option Contracts?

    Futures contract based on an index i.e. the underlying assets are the index known as index futures contract. For example, futures contract on NIFTY Index and BSE-30 Index. These contracts derive their value from the value of the underlying index.

    Similarly, the options contracts, which are based on some index, are known as Index options contract. However, unlike Index Futures, the buyer of Index Option Contracts has only the right but not the obligation to buy / sell the underlying index on expiry. Index Option Contracts are generally European Style options i.e. they can be exercised / assigned only on the expiry date.

    An index, in turn derives its value from the prices of securities that constitute the index and is created to represent the sentiments of the market as a whole or of a particular sector of the economy. Indices that represent the whole market are broad based indices and those that represent a particular sector are sectoral indices. In the beginning futures and options were permitted only on S&P Nifty and BSE Sensex. Subsequently, sectoral indices were also permitted for derivatives trading subject to fulfilling the eligibility criteria. Derivative contracts may be permitted on an index if 80% of the index constituents are individually eligible for derivatives trading. However, no single ineligible stock in the index shall have a weightage of more than 5% in the index. The index is required to fulfill the eligibility criteria even after derivatives trading on the index have begun. If the index does not fulfill the criteria for 3 consecutive months, then derivative contracts on such index would be discontinued.
    By its very nature, index cannot be delivered on maturity of the Index futures or Index option contracts therefore, these contracts are essentially cash settled on Expiry.

  5. What is the structure of derivatives markets in India?

    Derivative trading in India takes can place either on a separate and independent Derivative Exchange or on a separate segment of an existing Stock Exchange. Derivative Exchange/Segment function as a Self-Regulatory Organisation (SRO) and SEBI acts as the oversight regulator. The clearing & settlement of all trades on the Derivative Exchange/Segment would have to be through a Clearing Corporation/House, which is independent in governance and membership from the Derivative Exchange/Segment.

  6. What is the regulatory framework of derivatives markets in India?

    With the amendment in the definition of ''securities'' under SC(R)A (to include derivative contracts in the definition of securities), derivatives trading takes place under the provisions of the Securities Contracts (Regulation) Act, 1956 and the Securities and Exchange Board of India Act, 1992. Dr. L.C Gupta Committee constituted by SEBI had laid down the regulatory framework for derivative trading in India. SEBI has also framed suggestive bye-law for Derivative Exchanges/Segments and their Clearing Corporation/House which lays down the provisions for trading and settlement of derivative contracts. The Rules, Bye-laws & Regulations of the Derivative Segment of the Exchanges and their Clearing Corporation/House have to be framed in line with the suggestive Bye-laws. SEBI has also laid the eligibility conditions for Derivative Exchange/Segment and its Clearing Corporation/House. The eligibility conditions have been framed to ensure that Derivative Exchange/Segment & Clearing Corporation/House provide a transparent trading environment, safety & integrity and provide facilities for redressed of investor grievances. Some of the important eligibility conditions are :-

    1. Derivative trading to take place through an online screen based Trading System.
    2. The Derivatives Exchange/Segment shall have online surveillance capability to monitor positions, prices, and volumes on a real time basis to deter market manipulation.
    3. The Derivatives Exchange/ Segment should have arrangements for dissemination of information about trades, quantities and quotes on a real time basis through atleast two information vending networks, which are easily accessible to investors across the country.
    4. The Derivatives Exchange/Segment should have arbitration and investor grievances redressal mechanism operative from all the four areas / regions of the country.
    5. The Derivatives Exchange/Segment should have satisfactory system of monitoring investor complaints and preventing irregularities in trading.
    6. The Derivative Segment of the Exchange would have a separate Investor Protection Fund.
    7. The Clearing Corporation/House shall perform full notation, i.e. the Clearing Corporation/House shall interpose itself between both legs of every trade, becoming the legal counterparty to both or alternatively should provide an unconditional guarantee for settlement of all trades.
    8. The Clearing Corporation/House shall have the capacity to monitor the overall position of Members across both derivatives market and the underlying securities market for those Members who are participating in both.
    9. The level of initial margin on Index Futures Contracts shall be related to the risk of loss on the position. The concept of value-at-risk shall be used in calculating required level of initial margins. The initial margins should be large enough to cover the one-day loss that can be encountered on the position on 99% of the days.
    10. The Clearing Corporation/House shall establish facilities for electronic funds transfer (EFT) for swift movement of margin payments.
    11. In the event of a Member defaulting in meeting its liabilities, the Clearing Corporation/House shall transfer client positions and assets to another solvent Member or close-out all open positions.
    12. The Clearing Corporation/House should have capabilities to segregate initial margins deposited by Clearing Members for trades on their own account and on account of his client. The Clearing Corporation/House shall hold the clients’ margin money in trust for the client purposes only and should not allow its diversion for any other purpose.
    13. The Clearing Corporation/House shall have a separate Trade Guarantee Fund for the trades executed on Derivative Exchange / Segment.
      Presently, SEBI has permitted Derivative Trading on the Derivative Segment of BSE and the F&O Segment of NSE.
  7. What are requirements for a Member with regard to the conduct of his business?

    The derivatives member is required to adhere to the code of conduct specified under the SEBI Broker Sub-Broker regulations. The following conditions stipulations have been laid by SEBI on the regulation of sales practices:

    1. Sales Personnel: The derivatives exchange recognizes the persons recommended by the Trading Member and only such persons are authorized to act as sales personnel of the TM. These persons who represent the TM are known as Authorised Persons.
    2. Know-your-client:The member is required to get the Know-your-client form filled by every client.
    3. Risk disclosure document: The derivatives member must educate his client on the risks of derivatives by providing a copy of the Risk disclosure document to the client.
    4. Member-client agreement:The Member is also required to enter into the Member-client agreement with all his clients.
  8. What derivatives contracts are permitted by SEBI?

    Derivative products have been introduced in a phased manner starting with Index Futures Contracts in June 2000. Index Options and Stock Options were introduced in June 2001 and July 2001 followed by Stock Futures in November 2001. Sectoral Indices were permitted for derivatives trading in December 2002. Interest Rate Futures on a notional bond and T-bill priced off ZCYC have been introduced in June 2003 and Exchange Traded Interest Rate Futures on a notional bond priced off a basket of Government Securities were permitted for trading in January 2004.

  9. What is the eligibility criterion for stocks on which derivatives trading may be permitted?

    A stock on which Stock Option and single Stock Future contracts are proposed to be introduced is required to fulfill the following broad eligibility criteria:-

    1. The stock shall be chosen from amongst the top 500 stocks in terms of average daily market capitalisation and average daily traded value in the previous six month on a rolling basis.
    2. The stock’s median quarter-sigma order size over the last six months shall be not less than Rs.1 Lakh. A stock’s quarter-sigma order size is the mean order size (in value terms) required to cause a change in the stock price equal to one-quarter of a standard deviation.
    3. The market wide position limit in the stock shall not be less than Rs.50 crores. A stock can be included for derivatives trading as soon as it becomes eligible. However, if the stock does not fulfill the eligibility criteria for 3 consecutive months after being admitted to derivatives trading, then derivative contracts on such a stock would be discontinued.
  10. What is Mimimum Contract Size?

    The Standing Committee on Finance, a Parliamentary Committee, at the time of recommending amendment to Securities Contract (Regulation) Act, 1956 had recommended that the minimum contract size of derivative contracts traded in the Indian Markets should be pegged not below Rs. 2 Lakhs. Based on this recommendation SEBI has specified that the value of a derivative contract should not be less than Rs. 2 Lakh at the time of introducing the contract in the market. In February 2004, the Exchanges were advised to re-align the contracts sizes of existing derivative contracts to Rs. 2 Lakhs. Subsequently, the Exchanges were authorized to align the contracts sizes as and when required in line with the methodology prescribed by SEBI.

About Us
Sri Sairam Groups is 15 years old in online Trading. Available to trader’s platform and investor’s to buy/sell in all segments of exchanges such as stocks, futures & options, commodity and mutual fund under a least brokerage gratuitous orbit to facilitate our valued client’s.

Sri Sairam Groups Pricing
At Sri Sairam Groups core conception revolves around creating a brokerage gratuitous world. In contrast to other brokerages whose business standard is centered on charging hefty brokerage amounts, we allow our clients to trade under a simple Rs 15 per trade model regardless of the trade size.

How to Open a Sri Sairam Groups Account
Opening a trading and Demat account is simplified by Sri Sairam Groups. We also now open a trading and Demat account by just filling in the application online and sending us the printed copy.

Documents along with the application form to be sent:
For Trading and Demat Account Opening

  • Proof of Identity (Copy of PAN Card)
  • Proof of Address (Copy of any one of the following (Self Attested)
    • Passport
    • Bank statement (not more than 2 months old)
    • Voter ID
    • Driving license
    • Electricity bill (not more than 2 months old)
    • Landline telephone bill (only BSNL bill not more than 2 months old)

For Derivatives Trading (Futures and Options)
If you wish to engage in derivatives trading, in addition to the documents submitted for Trading and Demat Account Opening, also send a copy of any one of the following (Self Attested):

  • Copy of ITR acknowledgement.
  • Copy of annual accounts.
  • Copy of Form 16 in case of salaried income.
  • Net worth certificate.
  • Bank account statement for the last 6 months.
  • Copy of Demat account holding statement latest one.
  • Self declaration of income along with relevant supporting.

• Cheque of Rs 350 should be sent as an account opening processing fee. Make the cheque in favour of ‘Sri Sairam Global Securities Ltd'(in case of shares) or ‘Sri Sairam Multicommodities’ (in case of Commodities).

• You are also required to send us a cancelled cheque of the Savings Bank account which you wish to link to your Sri Sairam Groups Trading account,(this is mainly used to know MICR Code).

Important Instructions when filling in and submitting your application:

  • Please make sure that you fill all the mandatory information required.
  • Please make sure that the information provided is correct and complete.
  • Please make sure that you sign all pages of the application after printing it and before mailing it to us.
  • Please affix your passport size photographs and sign across them where indicated.
  • Please make sure you indicate the email address where you would receive confidential information such as your Password, User ID, etc.
  • Please make sure you mention your correct mobile and telephone numbers.
  • Please make sure that you use black ink when signing the form.
  • Please sign on copies of each and every document you submit with the application.

You can courier the application, mandatory documents and cheques to the following address:
SRI SAIRAM GROUPS
# 7/1 B, Sai Chambers, Gandhi
Bazaar Main Road, 1st Floor
(Above Indian Bank) Basavanagudi,
Bangalore 560004.

Alternatively, if you want us arrange for a courier pick-up at your doorstep, write to us at Info@srisairamgroups.com or call us +91 80 41506620/41229695.

Processing an account opening request
The average time taken to open your Trading and Demat account is 4– 7 working days from the time we receive a complete and an error-free application.

Trading at Sri Sairam Groups
Trading with Sri Sairam Groups is powered by the state-of-the-art NSE NOW trading platform. NSE NOW is available for use in two easy modes:

1. NSE NOW TRADING SOFTWARE: The NSE NOW proprietary software can be installed and downloaded directly into your computer reducing any uncalled for delays that may result from unreliable or slow internet connections.

2. NSE NOW EXPRESS: A web portal that allows you to trade uninterrupted with absolutely no delays in transactions conducted

NSE TAME (Technical Analysis Made Easy)
NSE TAME makes you to carry out technical analysis for your trades through advanced analytical graphs and charts. The simple and easy user interface provides users the flexibility to customize, view and analyze key indicators. You can access NSE TAME with your NSE NOW Password and User ID.

Call and Trade
You can also call us to place a trade at +91 80 4122 9695/41506620

Contract Note
The email address which you have mentioned, we will send you the contract note, confirming your trades at the end of the trading day.

BackOffice Account
The central point of access for all your trading and accounting activities is provided by Back office Account. On login you can view all your account details including trading records, account holdings, open and closed positions, margin reports, profit and loss statements, ledger books and a lot more.

Sri Sairam Groups Associate Model
We offer a very exciting lifetime opportunity where you can become a Sri Sairam Groups Associate simply by referring a trader to enroll with and become part of our fast growing family.

Sri Sairam Groups Trader Talk
Trader Talk brings traders together so that they can exchange knowledge, seek advice and share viewpoints. Trader Talk is Sri Sairam Groups online social networking is designed to be an interactive core for our trading community.

Sri Sairam Groups Cares
In today’s fast changing world we at Sri Sairam Groups believe it is important and necessary to care for the community we live and work in. Sri Sairam Groups Cares is an act on our part to give something back by creating value beyond the sphere of business.

We are committed to providing online education designed specifically to help traders of all abilities to increase their awareness and ability of the financial markets and become more knowledgeable when it comes to trading.

Our Education Center will reflect our promise to help empower traders through a collection of regularly updated training modules, video tutorials and reading guides covering a wide variety of relevant topics including quick and effective trading tips.

Some of the topics we plan to cover in our instructional modules include strategies on:

  • Stock Market and Trading Basics
  • Futures and Options
  • Hedging and Arbitrage
  • Swing Trading
  • Option Greeks

Eventually, we also plan to extend our curriculum to provide tutorials for individuals who wish to clear various accreditation exams such as the NSE Certification in Financial Markets (NCFM), BSE Certification on Securities Markets (BCSM) and Multi Commodity Exchange (MCCP) examination.

COMING SOON...

 

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