Lesson Notes By Weeks and Term - Senior Secondary School 2

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  4. Commodity exchange

Term: 1st Term

Week: 10

Class: Senior Secondary School 2

Age: 16 years

Duration: 40 minutes of 2 periods each

Date:       

Subject:    Commerce

Topic:-      Commodity exchange

SPECIFIC OBJECTIVES: At the end of the lesson, pupils should be able to

  1. Explain the meaning of commodity exchange
  2. State and explain the methods of trading
  3. Discuss the benefits of commodity exchange

INSTRUCTIONAL TECHNIQUES: Identification, explanation, questions and answers, demonstration, videos from source

INSTRUCTIONAL MATERIALS: Videos, loud speaker, textbook, pictures

INSTRUCTIONAL PROCEDURES

PERIOD 1-2

PRESENTATION

TEACHER’S ACTIVITY

STUDENT’S ACTIVITY

STEP 1

INTRODUCTION

The teacher reviews the previous lesson on cooperative society

Students pay attention

STEP 2

EXPLANATION

She explains the meaning of commodity exchange.

She lists and explains the methods of training

Students pay attention and participates

STEP 3

DEMONSTRATION

She discusses the benefits of commodity exchange

Students pay attention and participate

STEP 4

NOTE TAKING

The teacher writes a summarized note on the board

The students copy the note in their books

 

NOTE

COMMODITY EXCHANGE

A commodities exchange is a legal entity that determines and enforces

rules and procedures for trading standardized commodity contracts and

related investment products via physical or virtual means.

 

TYPES OF COMMODITY MARKET

  1. Spot: This is the buying and selling of commodities for settlement (payment and delivery) on the spot date. The settlement price is called spot price.
  2. Future: This is a contract to buy and sell commodity on a future date at a price decided when the contract is made.
  3. Option: This is a contract giving the holder the right but not the obligation to trade in a commodity on some future date at a pre-agreed price.
  4. Forward: This is a non-standardized contract between two parties to sell and buy at a specified future time at a price agreed upon today.

BENEFITS OF COMMODITY EXCHANGE

  1. It encourages the direct participation of financial institutions and investment that can help to mobilize fund for production in order to meet demand.
  2. High demand for agricultural commodities can encourage increase in agricultural output and quality.
  3. This market helps to guarantee returns on investment.
  4. It affords the participants to hedge against the expected price fluctuation of their commodities.
  5. It encourages investment in the exploration of solid minerals like gold, silver and aluminum.
  6. A well organized and efficient commodity market will attract foreign investment..
  7. The system is a means by which sellers and buyers are bought together to transact commodities.
  8. There is increase availability of finance to stockpile goods thereby assuring regular supply and delivery of commodities.
  9. It provides transparency in transactions

 

EVALUATION:   1. Explain the meaning of commodity exchange

  1. List and explain the types of commodity market
  2. Discuss the benefits of commodity exchange

CLASSWORK: As in evaluation

CONCLUSION: The teacher commends the students positively