The role and potential of commodities futures market in India

Commodity futures markets play a very important role in the global economy and in society in general for many reasons. The market mechanism of commodity futures markets helps to reduce price volatility by letting human nature work freely. Indian markets have recently thrown open a new avenue for retail investors and traders to participate in commodity derivatives. Those investors who want to diversify their portfolios beyond shares, bonds and real estate, commodities are the best option. This paper is an attempt to understand the role and potential of commodities futures market in India.