Gone are the days of a loud cacophony of price announcing commodity trading. In those days the commodity trading system was so tardy that traders would have sleepless nights wondering whether their trades had been recorded or not. This is because in place of the computer systems there would be a group of people seated around, taking orders and passing on the order sheets to other levels.
The traders would be in center calling out bids. The amazing fact is that in spite of such functioning each one involved in the commodity trading process had and eye for precision. A major falter was unheard of. But between then and now; between the ban and lifting of the ban things have changed radically.
Today, where commodity trading system is concerned, first and foremost it is all computerized. Traders need not visit a commodity trading market to speculate. With on line commodity trading they could sit in the confines of their home or office and call the shots. This is much organization in the commodity trading, at present.
The commodity trading system consists of certain prescribed steps or stages that enumerated here, as follows:
I. Trading: At this stage the following is the system implemented –
II. Clearing: This stage has the following system in place –
III. Settlement: At this stage the system followed is as given here:
Receipts and payments
Delivery upon expiration or maturity
The Exchange Central System for commodity trading is situated in Mumbai. This takes care of the Central Order Book. The traders across the country are connected to this central system via VSAT, as well as other modes of communication approved by the Exchange. The traders place their orders via the Traders Work Station (TWS), which is linked to the Exchange. If the trading request matches with the flash on the Central System then a trade confirmation is sent back to the trader.