A commodity market is a central place for purchasing and selling raw materials or primary products. Which commodities are traded on the commodity exchanges? They can be divided into four main categories: Bullion, Base metals, energy, and agricultural.
The two broad categories of commodities are hard and soft. Hard commodities are the ones that can be mined or extracted. Gold, oil, and rubber are some of the hard commodities. Soft commodities are primarily agricultural and livestock products like corn, wheat, coffee, sugar, soybeans, and pork.
The commodity markets mainly deal in derivatives products like futures and options. Futures offers you the right to purchase or sell a product at a pre-determined price on a specified date in the future. On the other hand, options give you the right but not the obligation to purchase or sell the commodity at a pre-determined price on a fixed date.
You can always check the prices of these instruments on the commodity exchange. The commodity prices fluctuate based on their global demand and supply. You can find Speculators, investors, and arbitrageurs to be actively involved in these markets.
How does commodity trading work?
Traders mainly trade these commodities via futures and options contracts on commodity exchanges. The Multi Commodity Exchange (MCX), National Commodity Derivative Exchange (NCDEX), National Stock Exchange (NSE), and Bombay Stock Exchange(BSE) are the leading commodity exchanges in India. Among these exchanges, MCX and NCDEX handle the bulk of the trades in the country.
The following commodities are actively traded in these two Exchanges:
Here are some of the points that you need to remember while you decide to begin commodities trading in India.
List of commodities on the exchange:
Every commodity exchange has a list of commodities listed on it, based on which you can choose the ones you want to pick. To do this, you need to open a commodity trading account with a broker registered with that particular exchange.
Trading account requirements:
The commodity brokers must be registered with either MCX or NCDEX and India's Securities and Exchange Board (SEBI).
How to start commodity trading with Axis Direct?
An 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.
If you are not an existing Axis Direct customer, you can activate your commodity trading 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 the commodities platform with the streaming market watch and real-time market information.
You can place commodity trades through the web on www.axisdirect.in (either on desktop or laptop), Mobile app and/or through the central dealer trading desk on 022-42274564/4598/4532.