Online Commodity Trading

Online commodity trading offers a way for an open, many-to-many system, where every user has equal access to price quotes and trading functionality. It provides a level playing field for all, without favoritism or control by a chosen few, where any user can view all quotes posted by other users in real time, act or trade on quotes posted by others, post their own prices and quantities for others to trade

The Online commodity trading site usually lists a large number of unique products covering a variety of commodities, structures, and settlement terms ranging from Oil, Natural Gas, Electric Power, Precious Metals, Emissions and Weather. It provides for various media ranging from Physical Delivery and Financial Cash Settlement. There are further derivative options available ranging from Forwards, Swaps, Options, Spreads, Differentials, Complex Derivatives.

Liquidity, or trade activity, is perhaps the best measure of success of an online trading commodity trading system. With most online commodity trading systems, traders can be sure of finding an interesting market development or trading opportunity almost every time they log on.

All quotes posted by users on any online commodity trading systems are live and firm. They can be acted on with full assurance of a completed transaction. The greatest advantage of an online system for trading is that just a click can be used to hit a bid or lift an offer.

The Online trading system operates almost continuously around the clock, 24 hours a day, seven days a week. This allows any user to extend the trading day, and easily pass the trading objectives to others in companies in different times zones.

The online commodity trading system in India is only an emerging segment yet. This is because the Internet boom in Indian is on the rise only now. The Internet charges are becoming minimal and the Internet is soon becoming a way of life in India. It is in this scenario that online trading is becoming more the way of trading in India.

Commodity Futures Trading Commission

The mission of the Commodity Futures Trading Commission is primarily to protect the market users and the public from malpractices such as fraud, manipulation, and abusive practices related to the sale of commodity and financial futures and options, and to foster open, competitive, and financially sound futures and option markets.

The Congress created the Commodity Futures Trading Commission in 1974 as an independent agency with the mandate to regulate commodity futures and option markets in the United States. The basic mandate taken up by the agency was to renew and expand since then.

Today, the Commodity Futures Trading Commission regulates the economic utility of the futures markets by encouraging their competitiveness and efficiency, ensuring their integrity, protecting market participants against manipulation, abusive trading practices, and fraud, and ensuring the financial integrity of the clearing process.
It is through effective oversight, that the Commodity Futures Trading Commission enables the futures markets to serve the important function of providing a means for price discovery and offsetting price risk.

The CFTC monitors markets and market participants closely by maintaining, in addition to its headquarters office in Washington, offices in cities that have futures exchanges-New York, Chicago, Kansas City, and Minneapolis.

Benchmarked against the functions and responsibilities assumed by the Commodity Futures Trading Commission in the United States, The Forward Markets Commission (FMC) was set up as the regulatory body for Commodity Trading in futures/forward trade in India. Similar to the function of the CFTC, The Forward Markets Commission is responsible for regulating and promoting futures trade in commodities in India.
The FMC has its headquarters in Mumbai and the regional office is located in Kolkata.

There are some 21 commodity exchanges in India. But most of these commodity exchanges are regional, offline and commodity specific. The government has recently allowed four national level multi-commodity exchanges to trade in all permitted commodities