Agri Commodities Market:
Last few decades of Agri-Market: Considering the low food grain production, several near-famine years, and a devastating and frankly humiliating dependence on food aid notably from the US prompted a major push to augment food grain production in the late 1960s onwards in the form of the so-called Green Revolution (GR). Currently, India is 75-80% dependent on Agriculture as the primary source of livelihood but if we see the participation in the market it is still very less compared to the participation in any other markets.
Exchange participation and Awareness
In the last 5 years, SEBI and others have actively participated in the participation of more people in the options segment as it is beneficial in many aspects compared to futures trading.
Introduction to Options
Options is a derivative contract that gives buyers of the contracts (the option holders) the right (but not the obligation) to buy or sell a security at a chosen price at some point in the future. Option buyers are charged an amount called a premium by the sellers for such a right. However, some basic strategies using options can help novice investors protect their downside and hedge market risk.
Benefits of Options
- Leverage
- Less time-consuming
- Multiple ways to create opportunities
- Calculated Risk
Value Chain Participants
A value chain is a set of activities that a firm or company operating in a specific industry performs in order to deliver a valuable product (i.e., goods or services) to the end customer. Following are the value chain participants involved.
Examples: Farmers, Exporters, Importers, Stockists, Traders.
Pain for Value Chain Participants
Market Scenarios for Value Chain Participants
Conclusion
We can finally come to the conclusion that in any market situation if one knows how to trade using the right options, one can make sure that they benefit from it no matter in which direction the market moves and it will also provide them a freedom from the risk involved and also to tackle with the market volatility.
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