Navigating Commodity Trading on MCX for Retail Investors

Watch this short video to learn how to set up commodity research recommendation notification on the ICICI Direct App

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Dos

1. Do understand the commodity contract specifications.
2. Pay all applicable margins.
3. Understand the delivery and settlement procedure.
4. Understand and comply with the taxation and other relevant laws.
5. Collect or pay market to market margins on a daily basis.

Don’ts

1. Don't trade any contract without knowing the associated risk.
2. Don't undertake off market transactions.
3. Don't delay payments or deliveries to members.

Don't get misled by rumours during advertisements, promises, and bull or bear run of the market sentiments.

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Hey there have you been hearing about the commodity Market? Have you been wondering how to start trading in commodities? Have questions? Let us try answering some of them today.

Is commodity trading for me?

It depends on the capital available, your risk profile, and understanding of the commodity markets. Commodities are traded as futures and options. Various commodity futures can be traded using margins starting from Rs 500 to 5 lakhs per lot, while options buying can be done using even lower capital.

I don't know anything about commodity trading. How do I get started with commodity trading?

To start commodity trading one should open an account with a broker registered with commodity exchange. Once the account is opened one can allocate margins for futures and options and start trading.

How much money would I require to start with commodity trading?

As low as rupees 500 is sufficient to trade in one lot of gold petal contract.

I heard commodities are volatile I do not want to risk much is commodities for me?

Commodities are real assets; they can be a hedge against inflation. It is good to diversify your portfolio with commodities, as commodities are a distinct asset class with returns that are largely independent of stocks and bond returns

What commodities are traded in India?

• Bullion: Gold, Silver, Bull decks.
• Energy: Crude oil, Natural gas
• Base Metals: Aluminium, Copper, Lead, Zinc and Nickel
• Agri: Cotton

What are commodity trading hours in India are holidays common with the equity markets?

In India, commodities can be traded from 9 am to 11:30 or 11 55 pm. Number of trading holidays are lesser compared to equity markets, as most of the days when equity markets are closed commodities are open in the evening session for trading.

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