Commodity Markets and Trading Quiz

Commodity Market

• A commodity market is a platform where commodities are traded.

Types of Commodities

• Hard commodities are natural resources that are extracted or mined, such as metals, oil, and gas.

Financial Derivatives

• A financial derivative is a contract that derives its value from an underlying asset, commodity, or security.

Derivatives Trading

• Derivatives are traded on exchanges, such as stock exchanges, commodity exchanges, and over-the-counter (OTC) markets.

Futures Contracts

• A futures contract is a type of financial derivative that obligates the buyer to purchase an asset at a predetermined price on a specific date.

Indian Energy Exchange (IEX)

• The Indian Energy Exchange (IEX) started its operations in 2008.
• The IEX is regulated by the Central Electricity Regulatory Commission (CERC).
• The IEX operates a day-ahead market, where participants can buy and sell electricity for the next day.
• One of the roles of the IEX is to provide a platform for buyers and sellers to discover prices and trade electricity.
• The IEX pioneered the concept of day-ahead market in India.

Power Exchanges in India

• There are two operational power exchanges in India: the Indian Energy Exchange (IEX) and the Power Exchange of India Ltd (PXIL).

Power Market Participants

• Reliance_infrastructure made an impulsive thrust into India's power sector.
• The IEX uses double-sided auction bidding.
• The participants in the power market provided by IEX include State Distribution Utilities, Industrial Power Consumers, Generating Companies, and Open Access Consumers.
• There are over 4,500 registered participants with IEX, including 300 private generators.