Know These Commodity Trading Basics to Rule The Market
To start trading in the commodity market, first, you have to open a trading account. Only through this account you can buy or sell any deal in the commodity exchange.
Necessary documents for opening a trading account:
To open a trading account, you must have a PAN card, address proof, and bank account. When you open a trading account with a broker, then this broker will provide you with the ID of an account. You can also trade yourself through this ID. For this, it is necessary to have an internet facility on your mobile, PC, tablet. Through this account, the broker has to pay a fixed fee.
When you buy a commodity in the market, you have to pay it all at once, but trading is also possible by paying some amount in the commodity futures market and this amount is called margin.Â
Each commodity has a fixed margin for buying or selling. Generally, this margin money is between 3-5 percent. But in the event of heavy fluctuations, the exchanges also charge extra or special margin.
Before investing in the commodity market, it is also important to know which exchanges are traded.Â
MCX is mostly traded on Non-Agri and NCDEX in Agri commodities.
For example, bullion, crude and base metals are traded on the country's largest non-agricultural commodity exchange.Â
Apart from this, some Agri commodities like crude palm oil are traded.Â
Similarly, most of the Agri commodities futures are traded on NCDEX. Other commodities including guar, gram, barley, wheat, soybean, coriander, castor, cumin, and turmeric are traded on NCDEX. Click here to know the commodity trading basics if you want to learn how to make money in the stock market fast.Â
If you do not want to deal with yourself, you can buy or sell the deal through the broker also.Â