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Abandon: To elect not to exercise or offset a long option position.

Accommodation Trading: Non-competitive trading entered into by a trader, usually to assist another with illegal trades.

Actuals: The physical or cash commodity, as distinguished from a futures contract. See Cash and Spot Commodity.

Agency Bond: A debt security issued by a government-sponsored enterprise such as Fannie Mae or Freddie Mac, designed to resemble a U.S. Treasury bond.

Agency Note: A debt security issued by a government-sponsored enterprise such as Fannie Mae or Freddie Mac, designed to resemble a U.S. Treasury note.

Aggregation: The principle under which all futures positions owned or controlled by one trader (or group of traders acting in concert) are combined to determine reporting status and compliance with speculative position limits.

Agricultural Trade Option Merchant: Any person that is in the business of soliciting or entering option transactions involving an enumerated agricultural commodity that are not conducted or executed on or subject to the rules of an exchange.

Algorithmic Trading: The use of computer programs for entering trading orders with the computer algorithm initiating orders or placing bids and offers.

Allowances: The discounts (premiums) allowed for grades or locations of a commodity lower (higher) than the par (or basis) grade or location specified in the futures contract. See Differentials.

American Option: An option that can be exercised at any time prior to or on the expiration date. See European Option.

Approved Delivery Facility: Any bank, stockyard, mill, storehouse, plant, elevator, or other depository that is authorized by an exchange for the delivery of commodities tendered on futures contracts.

Arbitrage: A strategy involving the simultaneous purchase and sale of identical or equivalent commodity futures contracts or other instruments across two or more markets in order to benefit from a discrepancy in their price relationship. In a theoretical efficient market, there is a lack of opportunity for profitable arbitrage. See Spread.

Arbitration: A process for settling disputes between parties that is less structured than court proceedings. The National Futures Association arbitration program provides a forum for resolving futures-related disputes between NFA members or between NFA members and customers. Other forums for customer complaints include the American Arbitration Association.

Artificial Price: A futures price that has been affected by a manipulation and is thus higher or lower than it would have been if it reflected the forces of supply and demand.

Asian Option: An exotic option whose payoff depends on the average price of the underlying asset during some portion of the life of the option.

Ask: The price level of an offer, as in bid-ask spread.

Assignable Contract: A contract that allows the holder to convey his rights to a third party. Exchange-traded contracts are not assignable.

Assignment: Designation by a clearing organization of an option writer who will be required to buy (in the case of a put) or sell (in the case of a call) the underlying futures contract or security when an option has been exercised, especially if it has been exercised early.

Associated Person (AP): An individual who solicits or accepts (other than in a clerical capacity) orders, discretionary accounts, or participation in a commodity pool, or supervises any individual so engaged, on behalf of a futures commission merchant, an introducing broker, a commodity trading advisor, a commodity pool operator, or an agricultural trade option merchant.

At-the-Market: An order to buy or sell a futures contract at whatever price is obtainable when the order reaches the trading facility. See Market Order.

At-the-Money: When an option’s strike price is the same as the current trading price of the underlying commodity, the option is at-the-money.

Auction Rate Security: A debt security, typically issued by a municipality, in which the yield is reset on each payment date via a Dutch auction.

Audit Trail: The record of trading information identifying, for example, the brokers participating in each transaction, the firms clearing the trade, the terms and time or sequence of the trade, the order receipt and execution time, and, ultimately, and when applicable, the customers involved.

Automatic Exercise: A provision in an option contract specifying that it will be exercised automatically on the expiration date if it is in-the-money by a specified amount, absent instructions to the contrary.

1How to start trading?Commodity Futures Trading is being carried out by “Ventura Commodities Pvt. Ltd.” with two exchanges viz.,
NCDEX - National Commodity and Derivatives Exchange Ltd.
MCX– Multi Commodity Exchange.
The number of commodities as of date available with MCX and NCDEX is more than 50, which includes precious metals, energy (crude oil , brent ), oilseeds, pulses, grains, spices, base metals and other agro commodities.
There are specific trading lots or trading units and specific delivery lots and delivery units for each commodity with both the exchanges. Each commodity also has different contracts available like 3 months / 4 months etc. The Quotation or the price available in the trading screen for each commodity varies for specific base quantities like, 20 Kgs., 100 Kgs., 10 Kgs., 100 gms.,etc. Similarly the tick size also varies commodity wise.

  • You could take up position, Long or Short i.e., Buy or Sell Commodities for the minimum contract size specified.
  • Multiple contracts could be placed at a given point of time within the exercisable limit or order size stipulated.
  • Similar to Stocks, Commodities too have a Daily Price Band, thus various Upper Circuits and Lower Circuits are possible.
  • Your view could work out for an Intra Day Trading, Short Term, Medium Term or Long Term outlook.
  • Trades in Commodities could be with the perspective of squaring off for differentials or for taking/giving Delivery too.
  • Hedging could be done, Arbitrage between both the exchanges, Calendar Spread etc. are some of the trading strategies.

2What is Margin concept?

  • Upfront Initial Margin is required before client places his order for trade.
  • The initial margins are in the band of 4 - 10% of the traded value of the commodities.

As in stocks, in commodities also the margin is calculated by VAR system. Normally it is between 4-10% of the contract value. The margin is different for each commodity. Just like in equities, in commodities also there is a system of initial margin and mark-to-market (MTM) margin. The margin keeps changing depending on the change in price and volatility.

3 What is MTM ? Mark To Market, or Marking to Market, is when asset values are determined "according to market prices" at the end of each day in order to arrive at the profit or loss status of the parties in a futures transaction. Mark to market isn't an exclusive futures trading term. It is a procedure used across the finance world in asset valuation. Mark to market has an extremely big impact in futures trading as it directly determines if you've made some money or has lost some money for the day.

4 What is duration of future contract?At NCDEX generally the contracts will expire on the 20th day of each month. If the 20th happens to be a holiday the expiry day will be the previous working day.
At MCX the expiry day of Base metals will generally be the 30th of every month. Bullion will generally be the 05th of every month If the 30th and 05th happens to be a holiday the expiry day will be the previous working day.However the contract period and the expiry dates vary from commodity to commodity.

5 What is Demat Electronic Warehouse receipt?Demat Electronic Warehouse Receipts are expected to be electronic records created by an approved agency after dematerialisation of the physical receipt issued by a Warehouse.
In securities market the physical shares of the company are dematerialized by their Registrar and Transfer Agents using a Depository empowered under the Depositories Act.

6Hedging in commoditiesHedging is a futures transaction that acts as a substitute for a later cash transaction. It is roughly equal and opposite to the position the hedger has in the cash market.
Let us take the example of Company A, which produces sugar and Company B, a consumer of sugar.
Company A plans to sell 50,000 quintals of sugar in December 2005. It expects futures prices to be lower and feels that Rs 1,850 per quintal will be a good price to get in December. This will cover the cost of production and give a reasonable margin.

7 How do we open an account & KYC formalities? General Terms and Conditions

  • Each client should enter into an Agreement with “Ventura Commodities Pvt. Ltd.” known as “Member Client Agreement” before commencing dealings in commodities.
  • Get the Client Registration Form duly filled up.
  • Ensure to obtain the UNIQUE CLIENT CODE.
  • Client should submit Client Registration Form duly completed in all respects with all the supporting documents attached.
    • Documents required (Individuals) : Colour Photo Copy of PAN Cancelled Cheque/Bank Statement Identity Proof – (Ration Card or Passport or Driving License)
    • Documents required (Non-Individuals) : Same as above, in addition the requirements are : Copy of last three years IT Returns Copy of Board Resolution Copy of MOA/AOA/Partnership Deed Directors details
  • DD/Cheques if forwarded to our Mumbai Corporate Office the same should be in favour of “Ventura Commodities Pvt. Ltd.”
  • Please ensure that the amounts collected are deposited only in “VENTURA COMMODITIES PVT LTD” Bank Accounts

Bank Account Details:
MCX - HDFC Bank Client A/c – 0600340016130, Fort Branch
NCDEX - ICICI Bank Client A/c – 000405014489, Nariman Point Branch

NOTE: As per the Regulatory procedures, no trade would be executed without the KYC (Registration form) and submission of the Upfront Initial Margin.

8 How to transfer the funds? Step 1:
Click  https://www.ventura1.com/Download/ViewDonwload.aspx?DocType=1
Step 2:

9 How to see my holding and margin status?

  • Web Login
  • Insert Client Code and Password
  • Click on Financial Ledger for Margin Status
  • Click on Script Ledger for Holding position.

10 How do I download Ventura`s trading platform? Click  https://www.ventura1.com/Download/ViewDonwload.aspx?DocType=1

11 What are features of trading platform?

  • Easy Installation
  • Common Trading platform (MCX & NCDEX)
  • Shortcut Icons & Keys
  • Customised setting as per user preference
  • Commodity Indicies
  • Margin File
  • User can create multiple market watch
  • User can add studies and create multiple comodity chart
  • User can view Net Position,Trades & Pending at a glance.
  • User can view Live Research Calls
  • User can choose the event, once the event is trigerred it will flash message.
  • User can view Margin availability details and trade accordingly
  • User can view his % of MTM loss against his total balance .

12 Whom should I contact for? Fund Payin
Email Id :- vcplbo@ventura1.com
Tel :- 022- 66227125/67547095

Fund Payout
Email Id :- vcplbo@ventura1.com
Tel:- 022-66227196/67547024

RMS
Email Id :- commodityrms@ventura1.com
Tel :- 022-66227140/66227297

CRM
Email Id :- crm@ventura1.com
Tel :- 022-67747570/67547043

Dealing
Email Id :- vcpldealing@ventura1.com
Tel :- 022-67547036/37/39/26
          022-66227229/28/27/24

Research
Email Id :- vcplresearch@ventura1.com
Tel :- 022-67547038/7298
          022-67747555

Sales/Marketing
Email Id :- vcare@ventura1.com
Tel :- 022-67547043

Franchise/Business Partner
Email Id :- commodityfrm@ventura1.com
Tel :- 022-66227226

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