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COMMODITY TRADING IN INDIA:


1. What are commodities?

Commodities are naturally occuring things.Well known commodities are Gold and Silver.Commodity trading involves buying and selling activities of physical things electronically.

2.What is commodity Trading?

Like Share trading we can do Commodity trading and can earn a good income.Basic principles are similar to share trading.

Commodity Future Trading is cyclic Buy – Sell process. Trade can be initiated with either Buy or Sell position and square off with opposite position. Initiate Buy position for uptrend and sell position for downtrend.

3.What is the procedure to trade in commodity market?

There are different commodity exchanges in India like Multicommodity exchange(MCX),ICEX,NCDEX NSEL.

MCX is the most preferred market for base metals,precious metals and Energy.It is a FUTURE market and traded based on Lot system.

While NCDEX is preffered to trade in Agri commodities.

One need to open a trading account with broker or sub broker registered at Exchange.

We can not trade commodities in share trading- Demat account.

For more details also visit MCX official website:

www.mcxindia.com

4.Which commodities are available for trading purpose?

Precious metals : Gold,Silver.

Base Metals : Copper,Lead,Zinc,Nickel,Aluminium.

Energy : Crude oil, Natural Gas.

5.What is difference between Share trading & commodity trading?

Share market is much more about domestic events,share market will grow as per nations GDP growth.

While commodity market is Gobal market.Commodity prices are needed to be same all over the world.Pices moves based on demand – Supply ratio.

Also in India equity markets closed at 3:30 PM while Commodity markets are closed at 11:30 PM. (10 AM to 11:30 PM)

6.How can low risk traders trade in commodity market?

For low risk traders Mini and Guine Lots are available.Within few days trading in 1 Gram will also possible.

E.g.Leadmini(1000 Kg),Zincmini(1000 Kg),Silvermini(5 Kg),SilverMicro(1 Kg),GoldMini(100 gram),GoldGuine(8 Gram),

1 Gram of Gold Petal contract.

7.What is the advantage of Future Market Trading?

In future Market,one needs to keep prescribed margin at MCX through your broker.Its not necessory to keep full amount in account.

E.g. Consider Mr.”A” purchsed 5 Kg Silver in Physical market and Mr. “B” purchased it in Future Market.

As Mr “A” have purchased in physical market he have to pay Rs.60,000 x 5 = 3Lakh to the jeweller.Also now he have a headche of safekeeping of the same.

Mr.”B” have purchased 5 Kg of silver in future Market.. MCX will ask to keep a margin of around 6% in your account.i.e MCX want you to keep balance of Rs. 18,000 at a time.

8.What is differnce in Silver,,SilverMini and SilverMicro Lot?

Silver is a Lot of 30 Kg.i.e. we are purchasing silver of 18Lakh and margin required is apprx. 80,000 at current rate of 62,000/kg and margin rate.

Silvermini is a lot of 5 Kg.

Silvermicro is a lot of 1 Kg,Here we can purchse 1 Kg of silver by keeping a margin of apprx Rs 3500/- in trading account as per current price of 62000 and rate of margin.

8.What is MTM?

Profit and loss in traders account reflected DAILY in account as per closing rate.

E.g One trader kept margin of 20000/- in trading account.He purchased 1 Lot of silvermini (5 Kg)at rate of 60000.

Suppose silver rates closed at 62,000/-.i.e.trader is in profit of Rs 2000/- per kg.so for 5 Kg profit is 10,000.and next day balance will be reflected as 30,000 which was 20,000 for preceeding day.

9.Is physical delivery possible in Gold?

Yes.It is possible.Gold is certified and 99.99% pure.

For 1 Gram Gold petal trade,delivery possible in multiples of 8 gram.

  

IF YOU ARE LOOKING TO OPEN A COMMODITY TRADING ACCOUNT PLEASE SUBMIT THE FOLLOWING DETAILS.


Category: Commodities

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One Response

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