Attitude of Individual Investors towards Commodity Trading in Disruptive Technological Era

The commodity future trading is one of the major investment avenues. But, still the people are preferred to conventional investment avenues like gold and real assets. At this juncture, the present study has focused on attitude and satisfaction of investors towards commodity market. Thus, this study helpful to understand the preferred commodity, objectives of investment, techniques for managing risks, reasons for investing in commodities and problems in commodity trading. The study identified that investors are invested in commodities as well as other diversified investment avenues. Low risk is a prime reason for investing in the commodities. The investors are highly satisfied with the return from the commodity trading. The study results helpful to the financial planners and brokers for understanding pulse of the investors.

Agricultural Commodity Trading: Is it Destabilizing Spot Markets?

Executive Summary The future trading has been held responsible by certain political and interest groups of enhancing speculative trading activities and causing volatility in the spot market, thereby further spiralling up inflation. This study examines the effect of future of trading activity on spot market volatility. The study first determined the Granger causal relationship between unexpected future trading volume and spot market volatility. It then examined the Granger causal relationship between unexpected open interest and spot market volatility. The spot volatility and liquidity was modelled using EGARCH and unexpected trading volume. The expected trading volume and open interest was calculated by using the 21-day moving average, and the difference between actual and expected component was treated as the unexpected trading volume and unexpected open interest. Empirical results confirm that for chickpeas ( channa), cluster bean ( guar seed), pepper, refined soy oil, and wheat, the future (unexpected) liquidity leads spot market volatility. The causal relationship implies that trading volume, which is a proxy for speculators and day traders, is dominant in the future market and leads volatility in the spot market. The results are in conformity with earlier empirical findings — Yang, Balyeat and Leathan (2005) and Nath and Lingareddy (2008) —that future trading destabilizes the spot market for agricultural commodities. Results show that there is no causal relationship between future open interest and spot volatility for all commodities except refined soy oil and wheat. The findings imply that open interest, which is a proxy of hedging activity, is leading to volatility in spot market for refined soy oil and wheat. The results are in conformity to earlier empirical studies that there is a weak causal feedback between future unexpected open interest and volatility in spot market ( Yang et al., 2005 ). For chickpeas (channa), the increase in volatility in the spot market increases trading activity in the future market. The findings are contrary to earlier empirical evidence ( Chatrath, Ramchander, & Song, 1996 ; Yang et al., 2005 ) that increase in spot volatility reduces future trading activity. However, they are in conformity to Chen, Cuny and Haugen (1995) that increase in spot volatility increases future open interest. The results reveal that the future market has been unable to engage sufficient hedging activity. Thereby, a causal relationship exists only for future trading volume and spot volatility, and not for future open interest and spot volatility. The results have major implications for policymakers, investment managers, and for researchers as well. The study contributes to literature on price discovery, spillovers, and price destabilization for Indian commodity markets.

EXAMINING THE NATURE OF RESILIENCE, ESPECIALLY AROUND ISSUES OF RISK AND SECURITY IN RELATION TO CRITICAL NATIONAL INFRASTRUCTURE AND FROM CATASTROPIC EVENTS

Purpose- This study bridges the gap between future trading prospects and information required to mold investors’ sentiments so s/he could devise better future trading strategies. Methodology/Sampling- This study takes all companies which trade the futures on the KSE. This study used the monthly data of the futures trading, stock return, stock turnover, high-low ratio and the realized volatility. The data is taken from January 2008 to December 2012 to test investor sentiments impact on future trading. Companies’ data is retrieved from the official website of KSE. The thirty-eight companies’ data is used in this study. Findings- The contrivance of future trading relationship with the investor sentiments is appraised in this study. The main difference between this and the previous discourse is that we construct the futures trading model that employ the investor sentiments. Practical Implications- The verdict of this study holds the important useful implications particularly as consideration of investor sentiments in the presence of the futures trading in Pakistan.

IMPACT OF INVESTOR SENTIMENTS ON FUTURE TRADING

Purpose: This study bridges the gap between future trading prospects and information required to mold investors’ sentiments so s/he could devise better future trading strategies. Methodology/Sampling: This study takes all companies which trade the futures on the KSE. This study used the monthly data of the futures trading, stock return, stock turnover, high-low ratio and the realized volatility. The data is taken from January 2008 to December 2012 to test investor sentiments impact on future trading. Companies’ data is retrieved from the official website of KSE. The thirty-eight companies’ data is used in this study. Findings: The contrivance of future trading relationship with the investor sentiments is appraised in this study. The main difference between this and the previous discourse is that we construct the futures trading model that employ the investor sentiments. Practical Implications: The verdict of this study holds the important useful implications particularly as consideration of investor sentiments in the presence of the futures trading in Pakistan.