How to make money in commodity trading in india

In hlw to our earlier pieces on futures trading and commodities tradingGet Ahead reader Satish Vijaykumar tells gow how he lost money when he dabbled in Commodity Futures. T he day the Sensex crossedI sold all my shares and decided to park my money. Equity mutual funds? They too would be dependent on the stock market performance. In commodities trading, you actually trade in commodities like gold, wheat, crude inndia, etc, not stocks. There are two things you must know. First of all, when you buy a Futures contract, you don’t pay the entire value of the contract, just a margin. The exchange will set a margin at, say, 3. Secondly, you make and lose money on a daily basis. Here’s an example that assumes I have bought that Gold Futures contract:.

Last Updated on October 5, The commodities market is one of the foundations of the global trade system. For the serious trader, a knowledge in how to trade commodities is vital: great profits can be made if a trader has in-depth expertise in the issues driving commodity prices, and understands the mechanics of how to trade on it. The advent of online commodity trading means that access to global markets is now available to private traders with a modest amount of capital thanks to accessible online brokers. A commodity is a basic good or raw material in commerce that individuals or institutions buy and sell. Commodities are often the building blocks for more complex goods and services. What separates commodities from other types of goods is that they are standardized and interchangeable with other goods of the same type. These features make commodities fungible. Generally, commodities are extracted, grown, produced and traded in large enough quantities to support liquid and mostly efficient global trading markets. These markets provide a transparent way for commodity producers, consumers and financial traders to transact business. Examples of commodities include corn, wheat, copper and oil. Commodities trace their origins to the beginning of human civilization, although the precise timing and location is the subject of debate. Evidence suggests that rice may have been the first commodity since the Chinese began trading it about 6, years ago.

Top Brokers in India

Buyers would place these tokens in sealed clay vessels and record the quantities , times and dates of the transactions on writing tablets. In exchange for the vessels, merchants would deliver goats to the buyers.

FAQs on Commodity

The following materials describe an investment in futures. The degree of leverage available can lead to large profits as well as large losses. Past performance is not indicative of future results. If you do not acknowledge the risks described above, the following materials should not be used for the purposes of making an informed decision regarding an investment in futures or options.

Based on my experience, I can confidently say, that unlike unorganized jewellers, Tanishq Will gold remain a good investment bet in amid stock market volatility? Should you invest in gold? Divided OPEC to keep crude oil outlook dicey. Copper in ‘bullish mood’; ended July with the best returns since January. Is OPEC now irrelevant in global crude oil business? Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express writtern permission of moneycontrol. Verify your Moneycontrol account. Please verify your today. Verify Now. What is a commodity market?

Make practice paper trades where you won’t have to risk your money. Buy or sell physical commodities. In addition, the brokerage firm will expect the client’s written acknowledgement of the risks in commodity futures and that he is capable and willing to assume such risks, including the loss of his investment. Index funds frequently occur in financial advice these days, but are slow financial vehicles that make them unsuitable for daily trades. Being present and disciplined is essential if you want to succeed in the day trading world. Start looking for commodity stocks to invest in by first locating a commodity that you want to invest in. Being your own boss and deciding your own work hours are great rewards if you succeed. Oct 13, Day trading vs long-term investing are two very different games. Study how traders develop and execute their strategies and how well they work. Options have significant profit potential due to the extreme leverage the option represents a small percentage of the total value of the futures contract and limited risk the cost of the option.

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September 19, 4 Comments. Derivatives or Futures and Options are leveraged instruments to trade in the stock market. There are broadly 3 groups of people who use derivatives. Majority of people who trade in derivatives come in the first category. Mostly these are young people who get job in corporate companies, open a new demat account and want to make some quick money. They are replaced by new traders as new graduates complete college and get job.

The cycle repeats. Here is an interview of Nithin Kamath where he mentions —. Trading stocks, commodities and currencies, he says, is quite the rage with the salaried IT crowd in these two cities of the South. So, how to make big and safe money in derivative trading.

There must be a way. Yes, there are many ways, and people in India and outside are making huge money from derivatives trading. If you want to trade derivatives, you should read this article by Prashanth Krish- where he clearly mentions. Filed under Indian Stock Market. Pingback: 5 Steps to become rich by Investing in stock markets? The Indian Wall Street.

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Monthly Income from MCX Commodity Trading

This story appears in the 29 March, issue of Forbes India. You can buy our tablet version from Magzter. To visit our Archives, click. Think Live Work Play. Video Slideshow Audio Twinterview.

Can one give delivery against futures contract?

Home Special Report Investment Special Monye money in commodities Commodities might be an ideal asset class to diversify investments and mitigate portfolio risk in such volatile times. By Shripal Shah. Email Address. Thank you for your comment, we value your opinion and the time you took to write to us! Comments 1. Kalpana Sunder. Naandika Tripathi. NH7 Weekender: 10 years of making—and facing—the music. In Afghanistan, being an artist is a dangerous job. Grace Chung. Heroes of Philanthropy Azim Premji is Asia’s biggest giver. Ambit Research.