Before start investing in commodity market investor should
have complete basic knowledge on it.
Commodity Market: the basic point is that it deals in
economic sector rather than manufactured products. Mainly there are two type of
commodities soft commodities and hard commodities.
In Soft Commodities agriculture product comes like wheat,
cocoa, sugar, coffee in hard commodities include mined like gold and oil.
The Government of India permitted initiation of
National-level Multi-Commodity exchanges in the year of 2002 -2003 and
according to this following exchanges have come into picture. They are
- Multi-Commodity Exchange of India Ltd, Mumbai (MCX).
- National Commodity and Derivatives Exchange of India, Mumbai(NCDEX).
- Indian Commodity Exchange (ICEX)
- National Multi Commodity Exchange, Ahmadabad(NMCE).
This commodity exchange is regional commodity exchanges and
also functioning all over the country.
The most important query is why trading in commodity the
most important two things are there first is Hedging and another is
Speculation.
Hedging: Against the exposure towards physical trades -for
risk management.
Speculation: Having no exposure in physical form.
Now the point comes in every new trader mind How to trade in
commodities: Investors trade in commodities in the form of indexed futures
contracts.
Futures contracts: It is a systematize contract which
amounts to an agreement to sell or buy a specified capital of standardized quality and quantity at a
specified future date (which is known as the contract’s “expiry date”) at a
cost agreed today (the futures price).
One of the most important factors in this market is
commodity indices?
Commodity Index is a exact or average of selected commodity
prices. This may be based on future price or spot price. Basically spot price
of a particular commodity is current prevailing market cost of that commodity being
quoted for immediate settlement. The purpose
of design commodity index is to representative of the board commodity capital
class, subset of commodities like metal or energy and to track a individual
single commodity like gold.
Investor who would like to maintain its maintain position in
a non-physical form could suffer some practical issues in this case investor
can do rolling from one future to another means if investor wants to maintain a
future position first past the expiry date of that future contract which
investor is holding, they can also sell to its expiry date and purchase a
future contract.
Start investing in Commodity market with TradeIndia
Research. We provide services in commodity like mcx normal pack, mcx premium
pack with 2 days free trial service on investor mobile. For more Visit us at http://tradeindiaresearch.com/mcx-normal.php or calls us at 7415033556.
No comments:
Post a Comment