The derivatives market of the Iran Mercantile Exchange hosted deals worth 150 trillion rials ($576 million) in the first 11 months of the current fiscal to Feb. 19.
Deals included 6.1 million futures and underlying assets, namely farm products (saffron, pistachio, cumin…) plus copper, silver and gold.
A futures contract is a standardized, legal agreement to buy or sell an asset at a predetermined price at a specified time in the future.
At the specified date, the buyer must purchase the asset and the seller must sell at the agreed-upon price, regardless of the current market price before the contract expires.
Underlying assets for futures contracts can be commodities – such as crude oil, agricultural products or other financial instruments.
According to the data seen on imereport.ir, Negin saffron, silver and units of gold-based exchange-traded funds were the main traded futures.
A total of 5.335 million Negin saffron futures worth 125 trillion rials ($480m) changed hands in the period, accounting for 87% and 83% of the total futures in terms of volume and value, repectively.
Negin is considered the best quality of saffron produced in Iran.
Investors bought 571,741 silver-based futures valued 12 trillion rials ($46m) in the said period, representing 9% and 8% of the volume and value of the futures contracts.
Likewise, 114,160 futures contracts backed by units of gold ETF valued at 10.45 trillion rials ($40m) changed hands, accounting for 2% of volume and 7% of the value of the futures.
Deals also included 71,819 Poushal safrron futures valued 926 billion rials, 7,258 pistachio futures valued 1.17 trillion rials, 4,707 cumin futures and 146 copper cathode futures.
Trade in copper cathode futures commenced late November and the nascent futures is expected to thrive in the near future. Copper futures are backed by copper cathode, which is the basic building blocks of the copper production.
*** Commodity CDs
Traders exchanged more than 232 million commodity-linked certificates of deposit (CD) worth 85.86 trillion rials ($330m) at the IME during in the 11 months.
The underlying assets were 12 commodities with cement at the top. Other assets were gold coins, saffron, rice, pistachio, raisin, cumin and dates.
In the mentioned period, 92.7 million cement CDs worth 496 billion rials were traded, accounting for 40% of the total traded CDs.
Negin saffron was the next best traded CD with 81.61 million certificate worth 21 trillion rials ($80m), accounting for 35% and 25% of total exchanged CDs in volume and value, respectively.
The number of gold-based CDs stood at 54.73 million worth 63.51 trillion rials ($244m), accounting for 74% of the value and 24% of volume of the CDs exchanged in the reviewed period.
Commodity CD is a security indicating ownership of the holder on a particular amount of a commodity supported by standard warehouse receipt issued by the warehouses certified by the Securities and Exchange Organization, the Iranian capital market regulator.
Selling a CD in the primary market means selling the stored or deposited commodity by the owner, and buying it means buying such a commodity. CDs securitize a company’s product inventory and offer buyers easy ownership of goods without the usual hassles of storage and insurance.
