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Commodity market: Most lively segment of stock market November 03 2020Commodity trading

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Most Active Commodity on MCX 


The top 10 commodities which showed great movement in the market are Crude oil, Coffee, Natural gas, Gold Wheat, Cotton, Corn, Sugar, Silver, Copper.

The top gainers in commodity market are Gold, Silver and Aluminum. On the contrary Nickle, Crude oil and Copper hit the losers list

Gold is topping the list of commodities in MCX with a price of 50,700.00 followed by Silver at 60,920.00, Cotton at 19,450.00, Crude oil at 2,639.00 and Natural gas at 248.50



Investors can invest in commodity market with Exchange Traded Fund (ETF) and Exchange Traded Notes (ETN) without directly investing in Futures.

Commodities can be classified into 4 types

 1. Metals-Gold, Silver, Platinum, Copper
 2. Agriculture- Corn, Beans, Rice, Wheat
 3. Livestock and Meat- Cattle, Eggs, Pork etc
 4. Energy-Crude oil, Gasoline, Heating oil and Natural gas

The best way to invest in commodity markets is known to be through Futures contract. These contracts give’s the trader an opportunity to buy and sell a particular amount of commodity on a fixed price. Though commodity market is said to be highly risky for Amateur investors due to the price swings of Future
market.

Recapitulate: Commodity market

Commodities are classified as a group of goods or assets which are used by people in daily life such as food, metals or oils etc. Commodities are dynamic in nature and can be bought and sold. Commodity markets are simply a place where one can buy sell or trade commodities. Commodity trading was introduced in India in 1875. The formation of Bombay cotton trade association in 1875 was the first milestone in the history of commodity trading in India. Although commodity trading went to a downfall due to invasion of foreign countries, government policies, natural calamities etc. How-ever commodity trading has done well in past years and is still gaining preference as compared to other forms of stock market. SEBI is regulating the commodity market since September 2015.

Types of Commodity exchange in India

    1- National Stock Exchange of India (NSE)
    2- Bombay Stock Exchange (BSE)
    3- Multi Commodity Exchange of India Limited (MCX)
    4- National Commodity and Derivatives Exchange Limited (NCDEX) 
    5- India Commodity Exchange Limited (ECX)
    6- The Universal Commodity Exchange (UCX)


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3. Pay 20% upfront margin of the transaction value to trade in cash market segment.

4. Investors may please refer to the Exchange's Frequently Asked Questions (FAQs) issued by NSE vide. Circular No. NSE/INSP/45191 dated: July 31, 2020 and NSE/INSP/45534 and BSE vide Notice No. 20200731-7, dated: July 31, 2020 and 20200831- 45 dated: August 31, 2020 and dated: August 31, 2020 and other guidelines issued from time to time in this regard.

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  • 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
  • On an average, loss makers registered net trading loss close to ₹ 50,000.
  • Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
  • Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost

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