International Journal of Application or Innovation in Engineering & Management
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ISSN 2319 – 4847
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Call for Paper, Published Articles, Indexing Infromation A STUDY ON ARBITRATION OPPORTUNITY IN COMMODITY MARKET, Authors : Dr Sampadakapse, International Journal of Application or Innovation in Engineering & Management (IJAIEM), www.ijaiem.org
Volume & Issue no: Volume 6, Issue 7, July 2017

Title:
A STUDY ON ARBITRATION OPPORTUNITY IN COMMODITY MARKET
Author Name:
Dr Sampadakapse
Abstract:
Abstract Arbitragers find out the opportunity from differences in prices of an asset in two different markets. They buy in the market where the prices are low and sell simultaneously in the other market where prices are high. Arbitrage opportunities are available in the derivative markets also. These opportunities are for very short period where no investment is involved. Arbitrage opportunity could be explored comparing spot and future market also. The cost of carry model establishes the relationship between the future price and the spot price of the underlying asset. The relationship between the future price and the spot price would be set in a manner that permits no arbitrage opportunity. The future price must be equal to the spot price of the asset plus the cost of storage of the commodity. If there is a difference then exist the arbitrage opportunity. The present paper is an attempt to find out whether arbitrage opportunity exists in Indian commodity market. Paper is an attempt to analyze the observed future price in relation to the theoretical price (fair price) for the selected commodities [Almond, Chana, Gold, Guarseed, Gur, Jeera, Platinum, Steel (Long), Sugar (M grade), Zinc.] Fair value of the futures is calculated using cost of carry model. Keywords: arbitrage opportunity, cost of carry model, commodity market
Cite this article:
Dr Sampadakapse , " A STUDY ON ARBITRATION OPPORTUNITY IN COMMODITY MARKET " , International Journal of Application or Innovation in Engineering & Management (IJAIEM), Volume 6, Issue 7, July 2017 , pp. 199-208 , ISSN 2319 - 4847.
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