What is Commodity Trading in Stock Market

Posted on

In the stock market, we often hear one more word apart from share trading, Commodity Trading, many people are confused at times that what is the difference between share trading and commodity trading, that is why today we will know in this information that what is commodity, how to trade commodity What things can we trade in it?

What is Commodity How to do Commodity Trading.

Commodities mean such things which we use in daily life and produce those things, we consider them the same for example rice, wheat, oil, LPG, gold and silver and the way in the stock market. We do derivatives trading on shares, in the same way we can do commodities derivatives trading in the commodity market.

Commodity trading types

There are 4 types of commodities trading in the commodity market.

  1. Agri Commodity (What is Agri Commodities)- In which Chinese lentils mustard oil gram soybean cardamom come
  2. Base Metals- such as aluminum copper lead nickel and zinc
  3. Precious Metals- The two commodities found in it are gold and silver.
  4. Anergy Commodity (Energy Commodities)- Which contains crude oil and natural gas.

Most of the trading of commodities is done in future derivatives i.e. we can buy and sell futures contracts of different time durations on these four types of commodities. The features are only for 3 months but can be longer than the features of commodities, for example, we can buy derivatives contracts for six months of crude oil, friends, the way shares are traded on the stock exchange. Commodity trading itself takes place on the commodity exchange.

There are 6 commodity exchange companies in India.

  1. MCX-Multi Commodity Exchange
  2. NCDEX-National Commodity and Derivatives Exchange
  3. NMCE-National Multi Commodity Exchange
  4. ICEX-Indian Commodity Exchange
  5. ACE-S Derivatives Exchange
  6. UCX-The Universal Commodity Exchange

That is, whenever we do training in commodities, our trade will be through all these exchange companies. Also the regulator of commodities is SEBI. Which regulates the stock market properties.

In the commodity market, most of the trading is done in crude oil and gold and in these commodities, people who work in this field do more trading.

How Risky is Commodity Trading

Trading in commodities is more risky than training in stocks because the price of any commodity changes very quickly in a very short period of time, this is because commodities have products that are sold on demand from physical supply, such as oil in Saudi Arabia. If there is an issue regarding this, it can have a great impact on the price of crude oil. Similarly, if the production of sugar in India falls far short of the requirement, the price of sugar in the Indian commodity market can rise very rapidly.

Friends, trading in commodities is done in derivatives and trading of derivatives is done on margin. Because of this, if our trade is misplaced, then we can lose a lot. But if our trade goes right, we can also make a lot of profit due to maraging. If we have good knowledge in any committee dealing in commodity market then we can definitely trade in it.

Most of the trading is done in futures instead of commodities, so if you are thinking of trading in the community, then first you have to understand the futures trading very well, the good thing is that we have given information about futures trading in this website By searching outside, you can get information about it.

How many exchange companies are there in the commodity market?

There are 6 exchange companies in the commodity market.

  1. Multi commodity exchange
  2. National commodity and derivative exchange
  3. National multi commodity exchange
  4. Indian commodity exchange
  5. Ace derivative exchange
  6. The universal commodity exchange

What is the most trading in the commodity market?

In commodity trading, most of the trading is done in crude oil and gold.

In today’s information, we learned about commodity trading, what things we can trade in it and how trading is done in it. If you have any query related to this information, then you can ask by commenting in the comment box below.
Read in Hindi

Leave a Reply

Your email address will not be published.