Currency, Commodity, and Government Securities

  • 1. Currency Basics

    1.1 – Module Orientation At the onset, let me give you a quick orientation so that you can set your expectations for this module. The focus of this module will be on three main topics – Curren ..

  • 2. Reference Rates & Impact of events

    2.1 – Dual View Think about a stock, Infosys for example, when you buy or sell Infosys – your view on the stock is straightforward – you are either bullish or bearish on Infosys. Therefore, you ..

  • 3. Impact of events (Brexit) & Interest Rate Parity

    3.1 – Brexit, the event extraordinaire! I originally planned to dedicate this entire chapter to the USD INR pair, which as you may know is the largest traded currency contract in India. But then, th ..

  • 4. The USD INR Pair (Part 1)

    4.1 – The contract We make an extremely critical assumption at this stage – we will assume you are familiar with how Future and Options contracts work. Technical Analysis plays an important role ..

  • 5. The USD INR Pair (Part 2)

    5.1 – Futures Calendar spread All else equal, the futures contract is always supposed to trade at a premium to the spot. This, as we know, can be attributed to the interest rate factor (cost of carr ..

  • 6. EUR, GBP, and JPY

    6.1 – The other currency pairs We focused on the USD INR pair extensively over the last few chapters, and we now look into the other currency pairs that are traded in the Indian markets, namely the ..

  • 7. Gold (Part 1)

    7.1 – Orientation As you know, there are two commodity exchanges in India – Multi Commodity Exchange (MCX) and National Commodity and Derivative Exchange (NCDEX). MCX is particularly popular f ..

  • 8. Gold (Part 2)

    8.1 – The London fix In the previous chapter, we discussed the various Gold contracts that are available on MCX. I want to begin this chapter by discussing how the prices of Gold in the spot market ..

  • 9. Silver

    9.1 – The Bullion Twins To begin with, I need to apologise for the delay in putting up this chapter. Perhaps this is the longest ‘in-between chapter’ break I’ve taken from the time I have star ..

  • 10. Crude Oil (Part 1), digging the past

    10.1 – The Commodities superstar If I have to pick one international commodity which can give you all the dramatic ups and downs of stock markets as portrayed in the movies, then it has to be the � ..

  • 11. Crude Oil (Part 2), the crude oil eco system

    11.1 – Mapping companies I’m hoping that the previous chapter gave you some insight into the current situation of the crude oil fundamentals. Some of you may also be interested in learning how cru ..

  • 12. Crude Oil (Part 3), the crude oil contract

    12.1 – The contract Crude oil is the most actively traded commodity on MCX. The combined value of crude oil (across all contracts) traded on MCX, on average, exceeds Rupees 3000 crores daily. This t ..

  • 13. Copper & Aluminium

    13.1 – Sumitomo Copper scandal If you are remotely connected to the commodity world, then this is one story you must have heard of – ‘The Sumitomo Copper Scandal’. This scandal unfolded in ..

  • 14. Lead & Nickel

    14.1 – Lead – some history, some basics. Would you believe, if I said that ‘Lead’, as in the metal Lead, played a role in bringing down the Roman Empire? Not Gold nor Silver, not diamonds or r ..

  • 15. Cardamom & Mentha Oil

    15.1 – Monsoon blues Back in the day, I traded stocks with ICICI Direct. Around the same time, MCX had just started operations, and ICICI was one of the first brokers to get a membership.  MCX was ..

  • 16. Natural Gas

    16.1 – History and background I know this chapter on Natural Gas is coming in late; we should have discussed this much earlier, probably when we discussed Crude oil. Unfortunately, I missed doing th ..

  • 17. Commodity Options

    17.1 – Commodity options, finally! My first commodity trade was on pepper futures, and this was sometime towards the end of 2005 or early 2006. Since then, I’ve closely tracked the developments of ..

  • 18. Cross Currency Pairs

    18.1 – All hail the king of Forex Outside India, the biggest market people trade-in is the Forex futures market. Right from the retail to institutional segment, everybody trades the forex futures ma ..

  • 19. Government Securities

    19.1 – The new beginning In a fascinating new development, NSE in collaboration with RBI has recently made it possible for retail investors to start investing in Government Securities, mainly the lo ..