A STUDY ON COMMODITY FUTURES MARKET OF COTTON IN INDIA

Rajdeep Beniwal, Suresh Bedi

Abstract


The purpose of this study is to find out how cotton is selected by the market players in the market for trading and speculation and analysed the influencing factors with the tools as simple moving average, relativity strength index, moving average convergence and divergence, exponential moving average, rate of change. So participants could consider before investing their money into cotton. Since 2002 commodities future market in India has shown a record boom in terms of the number of commodities permitted for derivatives trading as well as the echelons of futures trading in commodities. Hence it will be valuable to study the relationship between spot markets and futures markets of cotton in India. Investment in commodity market is widespread and rewarding for investors in entirely over the world. For farmers eyeing to evade risk and for investors looking for diversification away from stock markets, commodity markets present additional useful investment options. The commodity markets movements in quantity and players have been increased in the recent past. In India although the trading in commodity spot markets and commodity exchanges are booming yet it has to face few more issues like allowing FII’s, banks and other financial institutions to function in these markets. Also presence of a vibrant, active and liquid commodity market is usually reflected as a strong sign of development of a country’s economy. It is therefore crucial to have active commodity markets functioning in India. This study will be very helpful for the farmers, traders, financial economists, financial consultants, brokers and analysts.

 

Key Words: Commodities, Simple Moving Average, Relativity Strenght Index, Moving Average Convergence and Divergence, Exponential Moving Average, Rate of change.


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ISSN : 2251-1555