omkam commodities
DESCRIPTION
trade in NSELTRANSCRIPT
Omkam Capital Markets Private Limited
Safe investment opportunity in
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CorporateHigh Net worth Individual’sRetail Investor’s
Commodity Duration Investment Yield *
Castor Seed T+3 & T+36 Rs. 10 lacs 13-14%
Castor Oil T+5 & T+30 Rs. 10 lacs 13-14%
Cotton Wash Oil T+2 & T+25 Rs. 10 lacs 13-14%
Paddy T+2 & T+25 Rs. 3.3-4 lacs 13-14%
Steel T+2 & T+25 Rs. 4.8 lacs 13-14%
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*Yields are at member level and do not include brokerage. They may vary depending of demand and supply.
Investors can invest money and lock their returns
Investor has to buy in near settlement contract and sell in far settlement contract simultaneously
Price for both settlement available Exchange provides counter guarantee in
respect of quality of goods, weight and counter guarantee risk
No basis risk, No link with future contracts
T+2 and T+25 contract offers unique investment opportunity to investors
Investor purchases T+2 contract and simultaneously sells T+25 contract
Pay-in obligation is on T+2 while Pay-out of the funds will be on T+25. Entire settlement cycle is of 31-33 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
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• The difference in the buy price in near contract and
far contract provides the opportunity for the investors to get the ensured return.
• Tabular representation of the trade mechanism.
Contract Investors Traders
T+2 Trade on Same day
Buy (lower Price) Sell
T+25 Sell (Higher Price) Buy
Fund Movement Commodity Movement
Contract Investors Traders Contract Investors
Traders
T+2 T+2
T+25 T+25
Bank FD 9.25% for 390 days; NSEL Trading Opportunity 13-14%
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
AMOUNT REQUIRED AT PAY IN WITH VAT
QTY. IN BAGS RATE AMOUNT
A BUYING IN T+2 Contract Per 100 Kgs Rs.
1 Cost of One Truck (300 Bags / Lots) 300 2700 405000.00 405000.00
2 Exchange Transaction Fee: @ Rs 10/- Per Lac 40.50 20250.00
3 Delivery Allocation Charges: @ Rs 90/- Per Lac 364.50 425250.00
4 Brokerage of Member: Assumed at 0.15% 607.50
Minimum Order Size - 300 Bags
5 CNF Billing Charges: IBMA - Rs 100/- per bill of 300 Bags 100.00
Total Cost to Investors in Buying Paddy in T+2 Contract 406112.50
B SELLING IN T+25 Contract
1 Sale Proceeds of One Truck (300 Bags / Lots) RECEIVABLE 300 2748.5 412275.00
2 Less:Exchange Transaction Fee: @ Rs 10/- Per LAC PAYABLE 41.23
3 Less: Delivery Allocation Charges: @ Rs 90/- Per Lac PAYABLE 371.05
4 Brokerage of Member: Assumed at 0.15% 618.41
5 CNF Billing Charges: IBMA - Rs 100/- per bill of 300 Bags 100.00
Net Receivable for Investors in Selling Paddy in T+25 Contract 411144.31
C NET EARNINGS PER ONE TRUCK LOAD OF PADDY IN T+25 DAYS 5031.81
D SETTLEMENT DAYS CALCULATION
1 Date of Trading 6-Jan-12
2 Settlement Date for T+2 Contract i.e. FUNDS PAY IN 10-Jan-12
3 Difference i.e. number of days for which initial margin is blocked 4
4 Settlement Date for T+25 Contract i.e. FUNDS PAY OUT 13-Feb-12
5 Number of Days for which funds are invested 34
LESS: ONE DAY on account of utilisation of fund by both parties. 33
G COST OF INVESTMENT
1 Initial Margin Cost: @ 3% Up To T+2 Day 12150 4 48600.00
2 Balance Money: Day T+25 405000.00 33 13365000.00
3 VAT @ 5% debited at the time of funds pay in 20250.00 33 668250.00
Total Return calculated for one day investment of 14081850.00
H ANNUALIZED RETURNS [ NET EARNINGS*100*365/Total Investment] 13.04
Trade are backed by collaterals in the form of stock
Cash Margin of 1% is levied on the open position of the buyer
In case of adverse price movement, Exchange collects additional margin from the members
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
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