UNIQUE SERIES AKTU Syllabus
BMBAB304

Commodity Future Markets And Derivatives

L-T-P3-0-0 Credits3 Session2025-26 TypeTheory
Appears in 1 semester

MBA Agribusiness Management · Sem 3 (Core)

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Syllabus

5 units · 40 lecture hours
Unit1

Unit 1: Introduction to Commodity and Derivative Markets

6 hrs

Commodities and their classifications; Spot markets and agricultural mandis; Concept of derivatives; Types of derivatives – forwards, futures, options, swaps; Evolution of commodity futures markets; Significance of commodity derivatives in agriculture; Role in price discovery and risk management.

Unit2

Unit 2: Market Structure and Pricing Mechanisms

10 hrs

Need for commodity futures markets; Pricing of commodity futures; Basis and cost of carry; Evaluation of international commodity exchanges (CME, NYMEX, LME); Commodity futures in India – evolution and growth; Role of NCDEX and MCX; Regulatory framework – SEBI and policy reforms; Dynamics of a commodity exchange and trading platforms; Case studies.

Unit3

Unit 3: Market Participants and Trading Strategies

8 hrs

Types of market participants – hedgers, speculators, arbitrageurs; Trading strategies – hedging, spreading, speculation; Role of brokers and clearing members; Risk management strategies in commodity markets; Margin requirements and risk control measures; Case studies.

Unit4

Unit 4: Market Analysis and Decision Tools

8 hrs

Fundamental analysis – supply-demand factors, crop reports, weather, government policies; Technical analysis – chart patterns, trend lines, moving averages, oscillators; Analyzing commodity price chart patterns; Confirming tools – volume analysis, open interest, sentiment indicators; Case studies.

Unit5

Unit 5: Operations, Clearing and Emerging Trends

8 hrs

Trading techniques – straddles, strangles, spreads; Clearing and settlement process; Delivery mechanisms – physical and cash settlement; Taxation and accounting issues; Role of technology in commodity trading – electronic platforms, algo trading; Global trends in commodity derivatives; Case studies.

Course Outcomes (COs)5 outcomes

After completion of the course student will be able to:

  1. CO1Explain the structure, functioning, and importance of commodity futures and derivative markets in agribusiness. –K2 (Understanding)
  2. CO2Analyse the pricing mechanism, role of commodity exchanges, and evaluate the regulatory framework in India and globally. – AnalysingK4
  3. CO3Apply trading strategies and techniques for hedging and speculation in commodity markets. – ApplyingK3
  4. CO4Interpret and evaluate commodity price movements using fundamental and technical analysis tools. – EvaluatingK5
  5. CO5Assess the clearing, settlement process, taxation issues, and emerging trends in commodity derivative markets. – EvaluatingK5

Suggested Readings

  1. Hull, J. C. (2021). Options, futures, and other derivatives (10th ed.). Pearson Education.
  2. NISM. (2022). Commodity derivatives: Covering basics of commodity derivatives, indices, futures, and options along with clearing, settlement & risk management of commodity derivatives markets in India. NISM (An Educational Initiative of SEBI).
  3. Chatnani, N. N. (2019). Commodity derivatives: Markets and applications. Cengage Learning.
  4. Saha, S. S. (2020). Indian financial system: Financial markets, institutions and services (2nd ed.). McGraw-Hill Education.
  5. Kolb, R. W., & Overdahl, J. A. (2010). Futures, options, and swaps (5th ed.). Wiley- Blackwell.

Official AKTU syllabus

This subject is on page 10, 11 of the original AKTU PDF.

Official AKTU syllabus PDF ↗