A lot of people opt for commodity futures trading because it provides lucrative profits from minimum use of capital. Many people have benefited within a short span of time from only commodity futures trading. But this also the sector where the highest risk involvement occurs. Like many people gaining, a host of people also lost heavily under this platform. It is very important to use capital in commodity futures trading tactically and according to market experts.
Indian markets have also attracted lots of traders and retail investors to invest in commodity futures trading apart from bonds, shares and real estate. For a number of traders commodity futures trading is the best options to multiply money and generate a huge income within a short period. This is a novel platform for retailers and traders to do commodity futures trading because just a few years back people could invest only in gold and silver commodities apart from other commodity derivatives.
India has brought this sensational money generating platform of share market that is commodity futures trading by setting up three multi-commodity exchanges. Under these commodity exchanges now retail investors can also do trading along with other traders without acquiring any physical stocks or financial assets. This is for every trader is like a get-rich-at once scheme with less investment.
But, cautions to be maintained that commodity futures trading is not a casino game or any kind of gambling. A trader must take tit seriously if he or she wants to make a reasonable and consistent income. It is already mentioned that commodity futures trading involves tremendous risks and a trader must have accepted these risks to succeed.
Commodities are nothing like a very complex financial platform for traders. Understanding the risks involved and taking advantages at the right time from commodity trading, one can operate commodity futures trading like his or her own business. A trader would get a proficient portfolio diversification option through commodity future trading because commodity futures pricing is less volatile than equity and bonds.
Commodity futures trading is occupying a significant amount of India’s GDP that is almost Rs 13,20,730 crore (equivalent to 13,207.3 billion). After commencement in India The annual turnover for commodity futures trading touched around 1,400 billion. So with a positive perspective a person can trade in National Multi Commodity Exchange of India Ltd., also in National Commodity and Derivative Exchange and in Multi Commodity Exchange of India Ltd. All these three provide systematic settlement system between buyers and sellers which are electronically managed for commodity futures trading.
A trader can start trading by managing a broker who is in a membership with NCDEX and MCX. Like equities traders can do commodity futures trading through an internet connection by taking offers from SSKI (Sharekhan) and ICICIcommtrade (ICICIdirect), Refco Sify Securities and also from ISJ Comdesk (ISJ Securities) and Sunidhi Consultancy. A list of brokers for commodity futures trading is always available from a commodity exchange where a trader decides to do trading.
A trader can start trading with the lowest minimum INR5000 for commodity futures trading excluding brokerage charge of margins. For gold and silver commodity trading minimum amount starts from 9,500INR for 1 kg silver and 6500INR for 10gm gold. The most fluctuation in commodity futures trading and pricing can be seen in agricultural commodities.
For a trader who just has started commodity futures trading can trade with a single bank account. In future the trader will need a separate demat account for commodity exchange like stocks and this account will be under National Securities Depository Ltd to trade on the NCDEX. Along with these a trader would require to produce his or her PAN number, bank account number and other requisites.
Daily financial newspapers (for example, Economic Times) carry out spotlights on commodity futures trading and pricing with latest updates. Traders can procure information on agricultural commodities from financial magazines and periodicals. Online news updates are provided by various sites for commodity futures trading. By introducing commodity futures trading to traders, the government of India has made all commodities eligible to trade. Traders need to select those commodities which they require most to trade by taking advices from market experts accordingly.