Saturday, October 15, 2011

NORMS RELAXED FOR TRADING ON SPOT EXCHANGES

The futures market allows a client to give or take delivery of an asset at a fixed price on a future date,
while a spot exchange, in this context, entails delivery a day after a trade is executed or t+2 basis. However, like a futures market, it also allows clients to square off or cash settle trades on an intra day basis. Positions that are not squared off result in delivery. A client having a demat account with a commodity futures broker can now trade on commodity spot exchanges so long as the broker maintains a separate ledger account for clients on either market, issues separate contract notes and meets the capital adequacy and net worth criteria of each exchange.

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