Financial Market for Commodities
Đặt in sách Financial Market for Commodities tại HoaXanh - Thêm vào giỏ hàng...
- Mã sản phẩm: FIN121305
- Tình trạng: 2
Physical commodity markets are markets where products that have material reality are bought, sold and delivered. Financial commodity markets are markets where financial contracts are negotiated. The value of these contracts is derived from the value of the commodities. Prices form on each market; the central objective of this book is to describe and analyze the dynamics of physical prices and financial prices, with the trickiest point being understanding the joint dynamics of these two groups of prices. Commodities – agricultural, sources of energy or minerals – are mainly used in the initial phases of a production cycle. For example, corn serves as fodder for animals but is also used to produce fuel; oil makes it possible to provide fuel and other by-products in chemistry; and iron is a basic product in the steel industry. The concept of what a commodity is can vary from one activity to another. To take just one example: corn is undoubtedly considered as a commodity. However, for certain industries, the commodity is the starch – which makes up about of 72–73% of corn. It appears difficult in practice, and quite futile, to try and define commodities based exclusively on their physical characteristics. And thus, we offer the following definition: “[...] in practice, the first form through which the product obtained from a natural resource can travel through the next phase of its transformation is called a commodity” [GIR 15]. Commodity trading is a highly technical activity, reserved either for specialized companies or for specialized departments of more general organizations. This trading is highly globalized and there is fierce competition through prices. In this book, we will study those commodities where at least a part of the trading is via organized financial markets. As a result, we will exclude certain commodities for which there exists no financial market. For example, to the best of our knowledge, there is no market where forward contracts or call options are traded around cement. Another example: in France, there is no futures market for potatoes, which poses some problems for actors in this sector. It is not possible to draw up a list – not even an approximate list – of the commodities for which there is no financial market; it is, however, important to note that the absence of a financial market is not necessarily definitive as all that is required for a market to be created eventually is for a sufficient number of actors to express an interest in developing this market. If we go back to the origins of the financial markets for agricultural commodities – the mid-19th Century in the American Northwest – it can be seen that it was because traders, farmers and industrials simultaneously took an interest in this that the Chicago Board of Trade was established [MOR 79]. On the contrary, certain markets that performed well for a time disappeared when there was no longer a sufficient number of participants to keep it alive. The world of financial markets evolves constantly: certain contracts appear, and others disappear. All of the markets that endure do, however, have one point in common: they interest a diverse and sufficiently large group of operators for contracts to be negotiated using these markets as the intermediary.