BY: SRINATH REDDY.

P 1245-10-672-2008

India has a long history of commodity trading, extending over 125yrs; commodity includes all kind of goods. Future Trading is organized in such goods or commodities as permitted by central government. Crude oil is known as the king of all the commodities. Nowadays, oil is one of the most traded commodities in the world. Crude oil is important everywhere in the world. Any variation in the price of crude oil influences the economy. Just like any other product, variations in the price of crude oil take place due to its demand and supply.

Commodity markets are markets where raw or primary products are exchanged. These raw commodities are traded on regulated commodities exchanges ,in which they are bought and sold in standardized contracts. A commodity trading is a sophisticated form of investing. It is similar to stock trading but instead of buying and selling shares of companies, an investor buys and sells commodities. Like stocks, commodities are traded on exchanges where buyers and sellers can work together to either get the products they need or to make a profit from the fluctuating prices.

Oil is an essential commodity for all industrialized economies of the world and the demand for oil is soaring as industrialization is picking up pace. In keeping up with the demand, the price of crude oil has risen over 10 times in the last decade alone. One can participate in this booming market by trading in the oil commodity market or through exchange traded funds exclusively devoted to oil.

Investing in crude oil is just like investing in the stock commodities market but most people, especially small investors are wary of investing in oil Crude oil investment can be a bit complicated and proper analysis and research should be done when evaluating investment. At the end of the day, its the profit that matter but to make profit, an investor must study market trends movement of crude oil price supply/demand gap

To know the factors affecting the crude oil prices. To know the futures trading of crude oil. To know the trend analysis of crude oil prices. To know the fluctuation of crude oil prices. This study is to know the crude oil market.

METHODOLOGY The data is collected from secondary sources since most of the study is based on secondary data the necessary information has been collected from reports and others, and data is tabulated, analyzed and interpreted. Data is collected from the internet, books and newspaper.
SCOPE OF THE STUDY The study was conducted to have insight into trading under crude oil and process in commodity market. Scope of the study was to identify various technical tools used in trading. LIMITATION Use of limited technical tools. Study is conducted to limited time period Study is based on assumption Data is generated from secondary sources ,therefore accuracy and authenticity of data depends upon reliability of sources.

New York Mercantile exchange [NYMEX] Intercontinental Exchange [ICE] Dubai Mercantile Exchange [DME] Multi Commodity Exchange [MCX] Tokyo commodity exchange [TOCOM]

A financial powerhouse! Thats what Bonanza is for you! Established in the year 1994, Bonanza developed into one of the largest financial services and broking house in India within a short span of time. With diligent effort, acknowledged industry leadership and experience, Bonanza has spread its trustworthy tentacles all over the country with pan-India presence across more than 1400 outlets spread across 460 cities. Bonanzas offers you the perfect blend of financial services right from Equity Broking, Advisory Services that cover Portfolio Management Services, Mutual Fund Investments, and Insurance to exceptional Depository Services. Bonanza is affiliated with the best in the industry right from the NSE, BSE MCX, MCX-SX to CDSL, NSDL, etc. These affiliations prove our worth in the market and make Bonanza a name to reckon with.

DEMAND SUPPLY RESTRICTIVE LEGISLATION DECLINING PRODUCTION NATURAL DISASTERS SPECULATIVE BUYING

a futures contract is a standardized contract between two parties to exchange a specified asset of standardized quantity and quality for a price agreed today (strike price) with delivery occurring at a specified future date, the delivery date. The party agreeing to buy the underlying asset in the future, the "buyer" of the contract, is said to be long", and the party agreeing to sell the asset in the future, the "seller" of the contract, is said to be short. While the futures contract specifies a trade taking place in the future, the purpose of the futures exchange institution is to act as intermediary and minimize the risk of default by either party. Thus the exchange requires both parties to put up an initial amount of cash, the margin. Additionally, since the futures price will generally change daily, the difference in the prior agreedupon price and the daily futures price is settled daily also.

Crude Oil Contract Specifications Ticker symbol Contract Size Deliverable Grades Open Outcry: CL (NYMEX) 1,000 barrels (42,000 gallons) Specific domestic crudes with 0.42% sulfur by weight or less, not less than 37 degrees API gravity or more than 42 degrees API gravity. The following domestic crude streams are deliverable: West Texas Intermediate, Low Sweet Mix, New Mexican Sweet, North Texas Sweet, Oklahoma Sweet and South Texas Sweet. Specific foreign crudes of not less than 34 degrees API nor more than 42 degrees API. The following foreign streams are deliverable: U.K. Brent, for which the seller shall receive a 30 cent per barrel discount below the final settlement price; Norwegian Oseberg Blend is delivered at a 55 centsper barrel discount; Nigerian Bonny Light, Qua Iboe, and Colombian Cusiana are delivered at 15 cent premiums. All months NYMEX Open Outcry: Monday-Friday 9am-2: 30pm EST eCBOT Electronic: Sunday-Friday 6pm-5: 15pm CST Last Trading Day Trading terminates at the close of business on the third business day prior to the 25th calendar day of the month preceding the delivery month. If the 25th calendar day of the month is a non-business day, trading shall cease on the third business day prior to the business day preceding the 25th calendar day. All deliveries are ratable over the course of the month and must be initiated on or after the first calendar day and completed by the last calendar day of the delivery month. Dollars and cents per barrel. NYMEX: 1 cent per barrel ($10.00 per contract)

Contract Months Trading Hours

Last Delivery Day

Price Quote Size

The technical tools that are used under futures trading of crude oil are:
1.Candlesticks signals 2.Support and resistance levels 3.Head and shoulders 4.Zig-zag pattern 5.Moving average convergence divergence (MACD) 6.Relative strength index (RSI)