Commodity Derivatives and Risk Management
Authors Prabina Rajib
Publisher Prentice Hall of India
Year 2014

Over the last decade or so, commodity derivatives trading in India has seen a significant growth and has surpassed equity derivatives trading. Commodity risk management has become an integral part of any business operating in India. Therefore, knowledge of commodity trading has become important to the management student as well as professionals and practitioners. However, at present there is hardly any book providing a comprehensive treatment on the subject. Many universities and business schools are even not introducing the subject of commodity trading in their curriculum due to dearth of a standard text book. In this context, the aim of this book is to fill this void.
  • The book covers almost the entire spectrum of commodities traded in the Indian commodity exchanges and includes agricultural commodities, crude oil, base metal, precious metal, electricity, carbon, weather, freight, real estate, and water.
  • A distinguishing feature of the book is that it lucidly explains the peculiarities of various commodities and even delves into certain technical and historical details. This is intended to provide an understanding of the seasonality and idiosyncratic features associated with demand-supply dynamics of different commodities. As commodity market in a country cannot function in isolation, commodity contracts traded in other international exchanges like LME, CME,The Baltic Exchange, Nordpool etc. have also been discussed in detail.
  • Commodity derivatives contracts such as futures, FRAs, options, Tapos, swaps, spreads (crush, crack, dark and spark), collars, ETFs, contract for differences(CfDs) and cool bonds etc. have been discussed extensively.
  • This book documents the case studies involving important commodity price manipulations and frauds in commodity derivatives trading. These have been analyzed to bring out the necessity and the role of the commodity market regulators in maintaining market integrity. Major commodity derivatives trading losses that have shaken up even some prominent companies all over the world have been discussed to highlight the risks associated with commodity derivatives trading.
  • Around 40 business snapshots have been presented at appropriate sections in the book, so that a reader can apply the concepts to real life situations/happenings.
  • Around 100 numerical examples have also been worked in various chapters to help the reader develop a deeper understanding of the underlying theories.
  • Slides, additional multiple choice questions (MCQ), and solution manual would be made available to the instructors.