INVESTORS PREFERENCE IN COMMODITIES MARKET

A commodity futures contract is a type of derivative, or financial contract, in which two parties agree to transact a set of financial instruments or physical commodities for delivery at a particular price at later date. But participating in the commodity market does not necessarily means that you will be responsible for receiving or delivering large inventories of physical commodities. Buyers and sellers in the futures market primarily enter into futures contracts to hedge risk or speculate rather than delivery (which is the primary activity of the cash/spot market). That is the reason commodities are used as financial instruments by not only producers and consumers but also speculators.

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* Lecturer, Department of management studies and Research, Karpagam University  , Coimbatore - 641021 ,Tamilnadu

* * Lecturer, Department of management studies and Research, Karpagam University  , Coimbatore – 641021, Tamilnadu

 

 

1. Commodity market is extremely liquid, risky and complex by nature. Futures   market is centralized market place for buyers and sellers from around the world who meet and enter into commodity futures contracts. Pricing is mostly is based on an open cry system, or bids and offers that can be matched electronically. The commodity contract will state the price that will be paid and the date of delivery. Almost all futures contracts end without the actual physical delivery of commodity.

 

Commodity prices are generally less volatile than the stocks. Therefore it's relatively safer to trade in commodities. But the volume being traded in commodities is much less than the stock market. This is because of the two reasons that the investors are less aware about the commodities market and their risk perception. Hence many studies are conducted to know the investors' preference in commodities market.

 

STATEMENT OF THE PROBLEM

   Commodity market has been established for the benefit of small and large investors. But the level of investment in this trading is far lesser than the other modes of investors. The need of the hour is the proper guidelines and education to all investors.. An investment in commodity market is though less risky than that of the stock market. This is because, the investors are less aware about commodities market. Hence the purpose of the study is to assess the knowledge and preference of the investors in the commodity trading.

 OBJECTIVES OF THE STUDY

 PRIMARY OBJECTIVE

v     To study the investors' preference towards commodities market.

  SECONDARY OBJECTIVE

v     To identify the investment patterns of investors.

v     To know whether the investor's opinion about international commodities market affects the national trading activity.

v     To identify the source of information about commodities market.

v     To profile the commodities investors.