Commodity Market

aboutIn general, commodities can be moved from one place to another physically. The marketplace where energy, metals & agri-products trade, then it is known as commodity market. This trading happens on a commodity exchange, where various commodities and their derivative products are bought and sold. Commodities can be bought and sold just like we trade in shares.

To trade in commodity futures and options, there are three main exchanges in India.

They are:-

  1. The National Commodity & Derivatives Exchange Limited (NCDEX)
  2. The Multi Commodity Exchange of India Limited (MCX) and
  3. The Indian Commodity Exchange Limited (ICEX).

The National Multi-Commodity Exchange (NMCE) has been merged with ICEX

Today, MCX is the largest commodity futures & option exchange in India, with a market share of almost 70%.Whereas, NCDEX follows with a market share of around 25%, the remaining 5% for NMCE.

The Multi Commodity Exchange of India Limited (MCX) allows trading in bullion comprising gold and silver.Energy includes crude oil,natural gas and Brent crude among others, whereas metals consist of copper, lead, aluminium, zinc, nickel, etc.,

Agri-Commodity takes place in NCDEX allows trading in soybean, pepper, coriander, turmeric, crude palm oil, sugar, jeera , kapas etc.,

The ICEX allows trading in agri products such as plantation rubber, jute and also commodities like diamonds and steel.

There is no doubt that commodity trading is filled with risks, but there are various opportunities to make good profits too. This is an area where a small amount of capital can provide significant returns, but if there are some mistakes that newbies would lose their capital.To be a good futures and options trader, you must understand technical and fundamental analysis and be able to apply them to spot trading opportunities. Too often, traders get caught up in thinking they already know enough and aren't willing to learn anything new. Trading futures and options successfully requires your undivided attention to read and evaluate the markets effectively. However, if you remain open to new ideas, you will be able to change with the markets—and profit consistently, no matter what they do.