It invests directly in a portfolio of exchange-traded commodity futures contracts
that represent the main commodity sectors and are among the traded futures contracts in the global commodity markets.
The S&P GSCI, which tracks a basket of 24 leading commodity futures contracts
, spread across energy, metals and agricultural products, had returned 5.
Last year, the KRX announced a memorandum of understanding with the Dubai Mercantile Exchange, the largest energy futures and commodities exchange in the Middle East, to develop a trading ecosystem for commodity futures contracts
, in particular for crude oil.
Traditionally, managed futures strategies have been associated with commodity trading advisors using trend-following systems to trade commodity futures contracts
The NSEL has also suspended trading in e-series contracts till further notice after the Forward Markets Commission, or FMC, banned new commodity futures contracts
due to alleged violation of norms.
The Risk Weighted Enhanced Commodity Ex Grains Index, which the ETF tracks, is based on a diversified basket of 20 commodity futures contracts
from the sectors precious and base metals, primary commodities, and agricultural goods excluding grains.
The funds invest primarily in commodity futures contracts
and options on commodity futures contracts
, which have a high degree of price variability and are subject to rapid and substantial price changes.
In October last year, the SEC uncovered four "grave" violations of the Securities Regulation Code by Aman Futures in this case: non-registration of securities sold as investment contracts; non-registration as broker or dealer but acting as such; engaging in commodity futures contracts
despite a prohibition by the SEC; and, engaging in activities that are "off tangent" with the company's primary purpose as a general trading company.
New equity, derivatives products and commodity futures contracts
These considerable factors include the use of short and long positions in commodity futures contracts
, swaps, currency forward contracts and other derivatives.
The Dodd-Frank Act repeals the historic prohibition against transactions in commodity futures contracts
that are not carried out on, by, or through a commodity exchange and allows exchanges to permit certain off-exchange transactions for valid business reasons.
At the moment, futures-focused prop trading firms are trading Indian and Chinese commodity futures contracts
against similar products on the London Metals Exchange, CME Globex and the Tokyo Commodity Exchange.