How to Open a Commodity Trading Account Online

13 Dec 2022|

1 min read |

by ICICI Securities Team

After the merger of FMC with SEBI, one can use the same account for trading in all asset classes namely stocks, commodities and currencies. So, to begin trading in Commodities, one can enable Commodity segment in the existing trading account or a new account can be created with a registered trading member or broker.

Do’s and don’ts of commodity trading

Do’s	Don’ts
Understand the Commodity Contract Specifications	Don't get misled by rumours, luring advertisements and promises, and bull/bear run of market sentiments
Understand the Delivery and Settlement Procedure	Don't trade any contract without knowing the associated risks
Understand and Comply with Taxation and other relevant laws	Don't undertake off-market transactions
Pay all applicable margins	Don't delay payment/deliveries to Members
Collect / pay mark-to-market margins on a daily basis.

3 steps to open a Commodity Trading Account at ICICIdirect:

A. What are the Various Types of Commodities?

Commodities are classified into four categories as mentioned below.

Bullion: Gold and Silver
Energy: Crude oil and Natural gas
Base metals: Aluminium, Copper, Lead, Nickel, and Zinc
Agri: Crude Palm Oil, Cotton, Turmeric, Cumin Seeds, Coriander etc.

B. Benefits of Investment in Commodity

Commodities are an important asset class that can be related to our daily life because we use all the commodities in our daily life. The food we eat, the jewellery we wear; the fuel we use for our vehicle are part of commodities. Following are the major benefits of trading in commodities:

Portfolio diversification
Hedge against inflation
Increasing demand for commodities due to expansion of industries and population
Leverage
High liquidity and returns

C. What are the Timings For Commodity Market Trading

Commodity market trading is having the longest trading hour in India operating from 9.00 AM to 11.30 / 11.55 PM as detailed below.

Commodity Category	Trade Start Time	Trade End Time
Non-agricultural commodities	9.00 AM	11.30 / 11.55 PM
Agricultural Commodities with international linkage	9.00 AM	9.00 PM
Agricultural Commodities without international linkage	9.00 AM	5.0 M

D. What are the documents required to open commodity trading account?

To open a commodity trading account, following documents to be submitted to the broker.

Minimum of Rs. 100 demat holding (with ICICIdirect)
ID Proof
Address Proof
Bank Statement
Cancelled cheque
Salary slip

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How To do Commodity Trading| Commodity Trading for Beginners

E. What are the applicable charges for opening a Commodity account?

There is no fee required to activate or open a commodity trading account at ICICIdirect. It is simply a segment addition to your existing trading account.

F. Who all can open a Commodity trading account?

All resident Indians, corporates, Mutual Funds, PMS, AIF, FPI, etc., can trade in Commodity Derivatives.

NRIs are not allowed to trade in Commodity Derivatives.

G. What are the various types of costs associated with trading in commodity derivatives market?

The various types of costs associated with trading in the commodity derivatives market include the following:

Brokerage Charges
Commodity Transaction Tax
Stock Exchange Transaction Charges
GST (as applicable)
SEBI Turnover fee
Stamp Duty
Other Statutory Levies, if any

Disclaimer

ICICI Securities Limited has its registered office at ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400025, India, Tel No:- 022 - 2288 2460, 022 - 2288 2470. The non-broking products / services like iLearn and Financial Learning are not exchange traded products / services and ICICI Securities Ltd. is just acting as a distributor/ referral Agent of such products / services and all disputes with respect to the distribution activity would not have access to Exchange investor redressal or Arbitration mechanism. iLearn is not an exchange traded product/service of ICICI Securities Ltd. All disputes with respect to the activity on the platform would not have access to Exchange investor redressal or Arbitration mechanism.

ICICI Securities Ltd. is a Member of National Stock Exchange of India Ltd (Member Code :07730), BSE Ltd (Member Code :103) and Member of Multi Commodity Exchange of India Ltd. (Member Code: 56250) and having SEBI registration no. INZ000183631. ICICI Securities Ltd. is a SEBI registered with SEBI as a Research Analyst vide registration no. INH000000990. Name of the Compliance officer (broking): Mr. Atul Agrawal, Contact number: 022-69997051, E-mail address: complianceofficer@icicisecurities.com Investments in securities markets are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. ICICI Securities Ltd. and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Such representations are not indicative of future results. The securities quoted are exemplary and are not recommendatory. AMFI Regn. No.: ARN-0845. PFRDA registration numbers: POP no -05092018. ICICI Securities Ltd. acts as a Composite Corporate agent having registration number -CA0113. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. Please note, Mutual Fund, Corporate Fixed Deposits, Bonds, Alternate investment funds, Tax planning, Succession planning, NPS, IPO, Investment Advisory and Loans related services are not Exchange traded products and ICICI Securities Ltd. is acting as a distributor to solicit these products. Please note, Insurance related services are not Exchange traded products and ICICI Securities Ltd. is acting as a corporate agent to solicit these products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The non-broking products / services like Research, etc. are not exchange traded products / services and all disputes with respect to such activities would not have access to Exchange investor redressal or Arbitration mechanism. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investors should consult their financial advisers whether the product is suitable for them before taking any decision. The contents herein mentioned are solely for informational and educational purpose.

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