Today, we will be talking about some of the most popular commodity trading along with different types of commodity trading in India and how to trade them. From spices to energy and metals India’s commodity market offers a wide range of investment avenues for an investor.
Let us discuss some of the most popular commodity in our country’s market.
The first one is the crude oil. The market for crude oil is a highly competitive one because it is used to create many of the products like cosmetics, fertilizers, and plastics. In the commodity trading exchanges it is traded in the unit known as barrels.
The next one is aluminium the metal is lightweight and it’s versatility makes it a popular commodity. It is used in many industries like aerospace, electronics, packaging, etc. In India it is traded in lot sizes of one ton.
The next one is natural gas. It is a popular environmentally friendly fuel. It has also become very popular because of its lower prices in comparison to the oil or natural gas. It is also used for public transport across India in the form of CNG and in the markets it is traded in the lot size of 1250 million British thermal units or mmBtu.
Let us not talk about gold, it is a very popular, precious metal and it is used for jewellery-making and also it is used as a safe having to protect investments against an economic recession. It is treated in various quantities, which varies from eight grams, a hundred grams to one kg.
Lastly, let us talk about silver, just like gold. Silver is another precious metal, but it has many uses in other industries of science and technology as well. It is influenced by Indian as well as geopolitical events and is generally traded in the lot sizes of 30 kgs. There is also the silver mini commodity, which is traded in lot size of 5 kgs.
Now let us move on to the next part of the video. So how can we trade in these commodity market that we discussed so far? There are two ways to trade in the commodities market i.e. through derivatives like futures and options or through exchange traded funds or ETFs. Additionally, we can also invest in those mutual funds, which have the stocks of companies who deal with these commodities.
All of these will require the opening of trading and a demat account. These investments can be made to the stock exchanges of the country in India, the multi commodity exchange or the MCX and the national commodity and derivative exchange, or the NCDEX are the two most popular exchanges for commodity trading. The NSE and BSE also facilitate commodity trading is when, before trading in any kind of commodity, one must always keep a very close watch on the risk that surrounds the trade.
Here in the volatility plays a very major role and once you reach to a particular level of professionalism to have decent control over the emotions. One must not get affected by external news and should exit or enter the trend as per the one’s knowledge and experience.
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