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Target Segment
Corporate High Net worth Individuals
Retail Investors
Contract Specifications
Commodity
Castor Seed Castor Oil Cotton Wash Oil Paddy Steel Raw Wool
Duration
T+3 & T+36 T+5 & T+30 T+2 & T+25 T+2 & T+25 T+2 & T+25 T+2 & T+25
Investment
Rs. 8 - 10 lacs Rs. 8 - 10 lacs Rs. 10 lacs Rs. 3.5 - 4 lacs Rs. 4.5 - 5 lacs Rs. 3.5 4 lacs
Yield *
16% 16% 16% 16.5% 16.5% 16.5%
Wool Top
Crude Soybean Oil Soya DOC Refined Mustard Oil Refined Soybean Oil Refined Sunflower Oil RBD Palmolein Oil
16.5%
16.5% 16.5% 16.5% 16.5% 16.5% 16.5%
Pay-in obligation is on T+2 while Pay-out of the funds will be on T+25. Entire settlement cycle is of 35-37 days. Hence the money remains invested for such period.
Price differential between the two settlement dates offers a net annual interest rate of about 13-14% after deducting all expenses Income arising out of such trades are treated as Business Income
T+2
T+25
Sell
Buy
Commodity Movement
Contract
T+2 T+25
Investors
Traders
Contract
T+2 T+25
Investors
Traders
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Comparison
Bank FD 9.25% for 390 days; NSEL Trading Opportunity 16% Bank FD minimum duration 390 days; NSEL Trade duration 33-55 days depending on the contract Individuals have an option of rolling over their position as per their convenience
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COSTS INVOLVED IN BUYING AND SELLING IN PADDY TRADERS CONTRACT QTY. IN BAGS
A 1 2 3 4 5 BUYING IN T+2 Contract Cost of One Truck (300 Bags / Lots) Exchange Transaction Fee: @ Rs 10/- Per Lac Delivery Allocation Charges: @ Rs 90/- Per Lac Brokerage of Member: Assumed at 0.1% CNF Billing Charges: IBMA - Rs 100/- per bill of 300 Bags Total Cost to Investors in Buying Paddy in T+2 Contract B 1 2 3 4 5 SELLING IN T+25 Contract Sale Proceeds of One Truck (300 Bags / Lots) RECEIVABLE Less:Exchange Transaction Fee: @ Rs 10/- Per LAC PAYABLE Less: Delivery Allocation Charges: @ Rs 90/- Per Lac PAYABLE Brokerage of Member: Assumed at 0.1% CNF Billing Charges: IBMA - Rs 100/- per bill of 300 Bags Net Receivable for Investors in Selling Paddy in T+25 Contract C D 1 2 3 4 5 NET EARNINGS PER ONE TRUCK LOAD OF PADDY IN T+25 DAYS SETTLEMENT DAYS CALCULATION Date of Trading Settlement Date for T+2 Contract i.e. FUNDS PAY IN Difference i.e. number of days for which initial margin is blocked Settlement Date for T+25 Contract i.e. FUNDS PAY OUT Number of Days for which funds are invested LESS: ONE DAY on account of utilisation of fund by both parties. G 1 2 3 COST OF INVESTMENT Initial Margin Cost: @ 3% Up To T+2 Day Balance Money: Day T+25 VAT @ 5% debited at the time of funds pay in Total Return calculated for one day investment of H ANNUALIZED RETURNS [ NET EARNINGS*100*365/Total Investment]
300
2700
405000.00
20250.00
425250.00
300
2748.5
411350.45
5440.45
6-Jan-12 10-Jan-12
4
13-Feb-12 34 33
4 33 33
Risk Management
Trade are backed by collaterals in the form of stock Cash Margin of 10% is levied on the open position of the borrower In case of adverse price movement, Exchange collects additional margin from the borrower The exchange has defined guidelines for auction/closeout (circular: 029/2008) Adequate Settlement Guarantee Fund Warehouse Management includes Selection, Accreditation, Quality Testing, Fumigation and Insurance
Thank You
For futher details please feel free to contact us: Abhyuday : 9507439222,9939490734,9708028541
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