Which trading platforms can I use to trade in Commodities?
How can I open Commodity Derivatives Account with Axis Direct?
Any Axis Direct customer can avail Commodity Derivatives facility through a simple one-time online registration process https://tinyurl.com/y8wpwhpx and within 48 hours you will be provided rights to trade in commodity derivatives. In case, you are not an existing Axis Direct customer, you can open your account here https://simplehai.axisdirect.in/open-account
Once the commodity rights are enabled, you can use the same login credentials of Axis Direct and access commodities platform with streaming market watch and real-time market information.
Will I need to provide any additional KYC to open Commodity Derivatives Account?The one-time online registration process does not require additional physical documentation. The online registration captures 3 additional fields like
• Years of experience in Commodities Trading
• GST No (only if applicable)
• Nomination details (only if it differs from existing Axis Direct account)
Can I open only Commodity Derivatives Account?
To open a Commodity Derivatives Account, you need to open a 3-in-1 account first. In case you don't have an account, you can register your request https://simplehai.axisdirect.in/open-account
Once 3-in-1 Account is opened, you can place online request through a one-time online registration process and within 48 hours the commodity derivatives rights will be enabled.
Do I have to open separate Demat & Bank Account?
No. Existing Demat & Bank Account will be linked to Commodity Derivatives Account
Can NRIs open Commodity Derivatives Account with Axis Direct?
No. NRIs are not allowed to open Commodity Derivatives Account.
Which commodities I can trade in?
This predominantly depends on the exchange you are trading in. In India, commodity trading is predominantly done on two exchanges: Multi Commodity Exchange (MCX) and National Commodity & Derivatives Exchange (NCDEX). The following commodities are actively traded in these two Exchanges:
Multi Commodity Exchange (MCX)
• Bullion: Gold and Silver
• Metals: Aluminum, Copper, Zinc etc.
• Oil and Oil Seed: Refined Soy Oil, Soy Bean etc.
• Energy: Brent crude oil, Crude oil, etc.
• Other commodities: Urad, Chana, Wheat, Guar Seed, Sugar, Potato etc.
National Commodity & Derivatives Exchange (NCDEX)
• Bullion: Gold and Silver
• Metals: Aluminum, Copper, Nickel, Sponge iron and Zinc.
• Oil and Oil Seed: Castor oil, Crude Palm oil, Soy Oil, Soy Bean etc.
• Energy: Brent crude oil, and Furnace oil.
• Agro Commodities: Cotton, Chana, Maize, Guar seed, Sugar, Rubber, etc.
For a list of newly listed commodities, please visit www.mcxindia.com and www.ncdex.com
Can I place trade in all commodity exchanges?
Currently, Commodity Derivatives Trading is enabled only for 'The Multi Commodity Exchange of India Ltd (MCX)'. MCX has the majority market share of close to 90% in commodities and therefore it becomes the most important exchange from the market depth perspective. We are already in the process of extending this facility to trade through 'The National Commodity and Derivative Exchange' (NCDEX) shortly.
What are market timing for Commodity Derivatives Trading
Below are market timings for Commodity Derivatives Trading.
Commodity Market Time Agricultural(Agri)-MCX and NCDEX 9 am to 6.00 pm Internationally link Agri (Cotton, CPO, SYOREF etc) 9 am to 9.00pm Other Commodities (Gold, Silver, Crude etc) 9 am to 11.30/11.55 pm
Are all Derivative (Future & Options) contracts available for trading through Axis Direct?
No, due to probable illiquidity in far month contracts, only near (1st) and middle (2nd) month contracts are available for trading for most of the underlying contracts.
Which Products are available for Commodity Derivative Trading through Axis Direct?
The products offered by Axis Direct for Commodity Derivative Trading are Intraday & Carry Forward.
Can I use my Demat shares as Collateral for trading in Commodity Derivative through Axis Direct?
No. As of now you can place online fund hold request from the mapped Bank Account, post which you get limits to trade in commodities based on prescribed margin required.
What Margin will be charged for Commodity Derivative Trading through Axis Direct?
• For Intraday Product - only Span Margin will be charged
• For Carry Forward product - Exchange defined margin + Span Margin + Extreme Loss Margin + other regulatory margins will be charged.
What is Mark-to-Market (MTM)?
Mark-to-Market is a process by which the open positions in commodities are revalued on intraday basis taking into consideration the Latest Traded Price (LTP) of the commodities. On the day you enter a futures contract, Mark to Market or MTM is the difference between your entry value and the day's closing price. In the case of a carried forward position, it is the difference between the day's market price and the previous day's closing price.
If the MTM % falls below the threshold% (65% to 70%) of the net margin deposit available with Axis Direct, then the customer needs top up the funds immediately, failing which Axis Direct will square off the open position.]
Will Axis Direct inform before squaring off Derivative (Futures & Options) open positions for shortfall in margins / mark to market losses?
Yes. Axis Direct informs regarding margin shortfall and mark to market losses through email but exceptionally if the situation so arises then as a risk containment measure, open position(s) can be squared off even without informing the customers.
What is a Lot size?
When you trade in the Commodity Futures market, you have a standardised contract in terms of common quantity and one can only trade in multiples of this quantity or lot. This is called Lot size.
What do you mean by Rolling over?
This is when you want to close your current Contract and entering a similar contract due for another month.
What will happen, if customer do not square off Intraday Futures position on the same day?
Customer will have to square off all intraday open positions as per the below market timings on the same day itself, failing which Axis Direct will square off the Intraday Open positions, on best effort basis.
Commodity Market Time Auto Square Off Timer (Intraday Product) Agricultural(Agri)-MCX and NCDEX 9 am to 6.00 pm 5.30 pm Internationally link Agri- MCX and NCDEX (Cotton, CPO, SYOREF etc) 9 am to 9.00pm 8.30pm Other Commodities(Gold, Silver, Crude etc) 9 am to 11.30/11.55 pm 11.00 /11.30pm
Is there an option to take physical delivery through Commodities Trading in Axis Direct?
All commodity contracts are cash settled in Axis Direct. This means that you can get out of a contract, without taking the delivery of the commodity. You can simply pay the difference between the Buy and Sell contracts in cash. You need to square off or rollover the open position on or before start of Tender period.
What is Tender Period?
Tender period refers to the time period just few days before the expiry of the contract. Customers need to square off or rollover the open position on or before start of Tender period to avoid physical delivery of commodity being marked during tender period.
Will there be combined limit for Equity Account & Commodity Derivatives Account?
No. You will have separate limit for Commodity Derivatives Account and for all other products including equity, equity derivatives, mutual funds etc there would be a single combined limit.
Can I use my Equity Sales Proceed to trade in Commodity Derivatives Account?
No. Since, we have separate limit for Commodity Derivatives Account, you cannot use its equity sales proceeds to trade in Commodity Derivatives and vice versa. However, the combined limit is applicable for non-commodity derivative products and therefore sales proceeds can be utilized against them.
What are account opening charges / brokerage charges for Commodity Derivatives Trading?
For an existing AxisDirect customer, there are no additional Account Opening charges for Commodity Derivatives Trading. As an introductory offer, till 31st March 2019, FLAT 0.03% brokerage (or Rs 25 per order whichever is higher) will be charged for trades in future contracts whereas Rs 50. per lot will be charged for Option trades.