Investment products on NSEL

NSEL

www.nationalspotexchange.com

Contracts available under this category Caster Seed (T + 3 and T + 36) Caster Oil (T + 3 and T + 30) Cotton seed Wash Oil (T + 2 and T + 25) Paddy (T + 2 and T + 25) Raw Wool (T + 2 and T + 25 ) Steel (T + 2 and T + 25 ) Basmati Rice (T + 2 and T + 25)
www.nationalspotexchange.com

Opportunity for investors

Investors can invest money and lock his returns Price for both maturity available on the screen Investor can buy in near maturity contract and sell in far maturity contract simultaneously Exchange provides counter guarantee in respect of quality of goods, weight and counter party risk No basis risk, no link with futures contracts End to end illustration of caster seed contracts given in ensuring slides
www.nationalspotexchange.com

Castor Seed Trading Procedure for T+3 and T+36 contracts

www.nationalspotexchange.com

Pictorial representation of trading procedure

Trader / Miller

Mill

Trader Sell in T+3 and buy in T+36 and Payment at 39th Day

Exchange

Warehouse Investor
Cash Payment by investor Investor Buy in T+3 and Sell in T+36 same day www.nationalspotexchange.com

Farmer

Features of T+3 and T+36 Castor seed contract

T+3 and T+36 contract offers unique investment opportunity to the investors where his position is totally hedged. An Investor purchase in T+3 contract and simultaneously sells in T+36 contract. In this way he does not carry any price risk for the entire period. Pay in Obligation is on T+3 while pay out of the funds will be on T+36. Entire settlement is completed in 40-45 calendar days. Hence the investors money remain invested for such period. Price differential between the both contract offers a net annual interest rate of about 13% after deducting all expenses A sample calculation to the investment is given in the next slide.

www.nationalspotexchange.com

COSTS INVOLVED IN BUYING AND SELLING IN CASTOR SEED TRADERS CONTRACT EX KADI DELIVERY
COSTS INVOLVED IN BUYING AND SELLING IN CASTOR SEED TRADERS CONTRACT EX KADI DELIVERY QTY. A 1 2 3 4 5 B 1 2 3 4 5 C D 1 2 3 4 5 G 1 2 3 H I BUYING IN T+3 Contract Cost of One Truck (Approx. 300 Bags / Lots) Each Bag is of 75 Kgs Exchange Transaction Fee: @ Rs 50 Per Lac Warehouse Receipt Transfer Charges: Rs 50/- per 300 Bags Brokerage of Member: Assumed at 0.15% CNF Billing Charges: IBMA - Rs 100/- per bill of 300 Bags Total Cost to Investors in Buying Castorseed in T+3 Contract SELLING IN T+36 Contract Sale Proceeds of One Truck (Approx. 300 Bags / Lots) RECEIVABLE Less:Exchange Transaction Fee: @ Rs 50 Per LAC PAYABLE Less: Warehouse Receipt Transfer Charges PAYABLE Brokerage of Member: Assumed at 0.15% CNF Billing Charges: IBMA - Rs 100/- per bill of 300 Bags NET RECEIVABLE BY INVESTORS NET EARNINGS PER ONE TRUCK LOAD OF CASTOR SEED IN 36 DAYS SETTLEMENT DAYS CALCULATION Date of Trading Settlement Date for T+3 Contract i.e. FUNDS PAY IN Difference i.e. number of days for which initial margin is blocked Settlement Date for T+36 Contract i.e. FUNDS PAY OUT Number of Days for which funds are invested LESS: ONE DAY on account of utilisation of fund by both parties. COST OF INVESTMENT Initial Margin Cost: @ 5% Up To T+3 Day Balance Money: Day 36 VAT @ 4% debited at the time of funds pay in Total Return calculated for one day investment of ANNUALIZED RETURNS [ NET EARNINGS*100*365/Total Investment] Margin Converted to Fixed Deposit - Interest @ 8% P.A. FOR 2 DAYS TOTAL NET RETURN 9900 RATE Per 20 Kgs 940 AMOUNT Rs. 34897500.00 8724.38 1650.00 10469.25 0.00 34918343.63 35669700 8917.43 1650.00 10700.91 0.00 35648431.67 730088.04 10-May-11 13-May-11 3 30-Jun-11 48 47 1744875 34897500.00 1395900.00 3 47 47 5234625.00 1640182500.00 65607300.00 1711024425.00 15.57 0.07 15.64

9900

960.8

0.67

Precaution to be taken
Exchange holidays to be factored Due to sundays and other holidays, the maturity of 36th day settlement may go up to 40-42nd day Hence, return should be calculated based on such extended period

www.nationalspotexchange.com

Thank You

National Spot Exchange Limited ,102 A, Landmark, Suren Road, Chakala, Andheri (East), Mumbai - 400093. Tel: +91-22-67619900 Fax: +91-22-67619931 E-mail: info@nationalspotexchange.com