Official notification for first batch is out

Academic Update from GOLD at 18 Academic Desk:

We had previously asked a question on Steel. Now let us analyse a possible price movement of steel, purely on economic sense basis.

We all are aware that the dollar lately got appreciated, i.e. buying dollar in ruppee terms became more expensive. What do you think could have happened to steel prices in India?

Well, the Steel mill owners in India, hiked the Steel price by almost 1000 Rs per tonne. (i.e almost 80% jump)

Why did this happen?

Well, when Dollar appreciated, it became more expensive to import Steel and therefore the Indian Steel mill owners realised that demand for Indian steel has gone up. Consequently, they hiked the price.

If you had gone long for a 3 month period on Steel,(or bought steel for a 3 months by trading on the exchange) the possible gain could have been almost 80%.

See how a fluctuation of Dollar vis-a-vis Ruppee can make you earn on the commodity market.

Learn and Earn!! -The Gold at 18 academic team.

Until then read another Academic Snippet, posted by one of our contestants Mayur Gupta!!...Good Job Mayur...:

Continuous Commodity Index
The Continuous Commodity Index (CCI) is a broad grouping of 17 different commodity futures, which is a benchmark of performance for commodities as an investment.

The CCI is equally weighted with 17 commodity futures. Each commodity represents 5.88 percent of the index.

... Commodities Included in the Continuous Commodity Index are energies(crude oil ,heating oil, natural gas) ,grains(corn,soyabeans,wheat) ,livestock(lean hogs,live cattle) , softs(coffee,cocoa,cotton,orange juice,sugar,) and last but most important metals(gold,silver,platinum,copper)

The CCI has two main purposes. The first is to act as a representation of how well commodities are performing – up or down?
The second purpose of the Continuous Commodity Index is that it is a futures contract where investors or traders can buy or sell a diversified group of commodities. This is much simpler than buying 17 different futures contracts and managing them at the same time.

Thanks Mayur!!

Academic Update from GOLD at 18 Desk:

Everyone considers Gold as a safe investment option. Let us consider this case !!

Our family member has around 26000 to invest in Gold. So our family member decides to go to a Bank to buy a 10 gm gold coin. Great!! (Assuming that they read in newspaper that value of 10 gm of Gold is 26000).

But as soon as they approach the Bank, they realise that they can purchase the 10 gm gold coin not for 26000 that was mentioned in the newspaper, but the bank has a selling rate of 26650 for a 10 gm gold coin. Nevertheless, our family member purchases and returns home all excited.

Next month, the newspaper promptly says , Gold now at 27500 for 10 gms.

Our family member reads it and calculates immediately that Gold has grown from 26000 to 27500 in one month. Almost 69.23 percent annualised return jump... WOW!!

Now they decide to sell the gold coin to monetise this return and find themselves at a jewelers shop. The jeweler looks at the gold coin and is willing to pay 26800 for the coin as that is the sell price for that coin. Our family member then gets 150 Rs. in absolute term and realises that the petrol spent on this transaction was much more !!

So the reality is that we need to move to an Exchange for making such kind of Investment Transactions !!... (Did we hear Jaago Grahak Jaago)

Learn from us and make everyone around wiser. - The Gold @ 18 Academic Team.

Academic Update (but this time it is from one of our contestants Mayur Gupta):

Mayur Gupta shared this yesterday...And we believe it has to make it to the main wall!!... Good Job Mayur .... (We like it!!)

There is a strong correlation between Canadian dollar and oil prices. On a day-to-day basis, the correlation can break, but over the long term this correlation has been strong . Canada is the seventh-largest producer of crude oil in the world and continues to climb up the list, with production in oil sands increasing regularly.Canada supplies its crude oil to many countries including U.s. and China.
So ther is clearly a positive relationship between oil and the Canadian loonie(Canadian dollar).So the price of oil acts as a leading indicator for the price action of the USD/CAD. When oil prices go up, USD/CAD falls, and when oil prices go down, USD/CAD rises.

Thanks Mayur!

Knowledge Time from the GOLD at 18 Academic Desk:

Sensex is an index for Bombay Stock Exchange which is a bundle of shares which represent the market, Similarly NIFTY is an index for National Stock Exchange.

Question: Do you know what is the index for the agro commodities at NCDEX?
Ans: It is called DHAANYA.
Dhaanya is a Sanskrit word that represents a state of plenty and abundance of food grains. In short it mean prosperity. It is an index comprising of 10 commodites. They are channa, cotton seeds oilcake, chilli, gaurseeds, jeera potato, pepper, mustard seeds, soya oil and turmeric.

Knowledge Time from the GOLD at 18 Academic Desk:

If you thought after doing a course like Gold at 18, your job prospects are only with Trading companies, you might just be missing the point. Want to know how, well, let us consider a case of an Airline. Let us say, Jet or Kingfisher. Jet or Kingfisher have very high costs of ATF or Aviation Turbine Fuel. Now they need Strategic Traders for two purposes: 1. For identifying that the ATF costs might go up in the short term or long term 2. For insulating against this high cost.

For the former, they need strong strategic advisors who can pre-empt the possibility of a price rise, through understanding various economic indicators and for the latter they need traders to HEDGE their position, so that even if their costs go up, the profit margins are not squeezed out. Gold @ 18 would be your first step towards both!!

Possible new word: Hedging..We will discuss it more...
Thanks for reading...Learn and Earn...-The Gold @ 18 Academic Desk!!

Knowledge Time from the Gold at 18 Academic Desk: A little perspective on OIL TRADING.

Gentleman called, Andrew Hall became infamous in 2009 when he demanded $100Mn from Citi Bank, when they were just given bailout by the government. Hall had earned more than $2bn for citi bank (as reported) by trading in oil futures. He correctly predicted the steep rise in oil prices which was seen in 2005-08. ... 100 Million dollar would be around 490 crores. And with this we rest our case on commodity Trading... - Gold at 18 Academic Desk.

Source: Wikipedia

Knowledge Time from the GOLD at 18 Academic Desk: This one is on Trading strategies. Read it carefully. Logical and Fun!!.

QUESTION: Soya and soyabeen oil are largest traded product on NCDEX. there is a very old trading strategy which if employed correctly, generates good profits?

ANSWER: It is PAIR TRADING. What is PAIR TRADE- Ok, the two commodities Soya and Soyabean logically are related and the price movement should be in logical one direction. So if you are able to understand the mean price, then it makes good sense to BUY the Commodity which is below the MEAN price and SELL the Commodity which is above.... Logical is it not!!

Learn More strategies. -Gold @ 18 Academic Desk.

Knowledge Time from the Gold at 18 academic desk:

And you thought Gold is the most traded commodity on the NCDEX exchange. Well you are in for surprise- the 5 most traded commodities are guar seed, crude oil, chana, soya oil and soyabeans.... Did you even know what kind of margins are possible on agro commodities...Well, that is why we are here...Know more, learn more and earn more... Only was wondering if we should have named the course Guar @18 and the Gold Ambassadors as The Guar Ambassadors...hmmm... :)

KNOWLEDGE TIME from the GOLD at 18 Academic Desk:

Question: Trading volume on NCDEX Last year (2010-11): Rs.1,410,602 crore or Rs. 4,686 crore per day. What does this mean for a trader?

Ans: At an exchange alot of traders are buying and selling. High volume implies liquidity. Nutshell, you can buy a contract and sell a contract more easily, thereby profiting from trading positions.... (possible new words: Contracts ..we will cover later)

For more such facts, keep tuned in. - Gold@18 Academic Desk.