How To Trade In Commodity Derivatives?
Historically commodities market moves in the opposite directions to stock markets, providing an excellent opportunity for portfolio.
TYPES OF PRODUCTS IN COMMODITIES MARKET
Futures: Allows you to hedge your positions or take leveraged bets on Commodities
Allows you to take thrice the exposure as compared to the Futures margin
Trade in Futures on commodities with lesser capital as compared to the actual commodities
Options: A financial derivative contract that allows you right to buy or sell a Commodity on future date by paying some premium
Options - Margin
Hedge your positions or take a bet on future price of Commodity by buying or selling options
TYPES OF COMMODITIES
Put your money where your mouth is! Half of Indian workforce is employed in farm outputs
Trade in Crude oil, world's most traded and valuable commodity aka black gold
Oil and Oil Seed
Trade in the vegetable oil where India occupies the fifth position in the world
Trade in building blocks of infrastructure like Zinc, Aluminium, Copper etc.
Benefit from price movements of Gold & Silver without bearing the risk of possession
Any Axis Direct customer can avail Commodity Derivatives facility through a simple one-time online registration process by clicking here 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 by clicking 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.
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 by clicking here 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
No. Existing Demat & Bank Account will be linked to Commodity Derivatives Account
Below are market timings for Commodity Derivatives Trading.
|Agricultural (Agri)||10:00 AM to 5:00 PM|
|Internationally link Agri (Cotton, CPO, SYOREF etc)||10:00 AM to 9:00 PM|
|Other Commodities (Gold, Silver, Crude etc)||10:00 AM to 11:30 PM|
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
To begin with, you can place commodity trades only through web (either on desktop or laptop) and/or through dealer trading desk on 022-42274564.
For an existing AxisDirect customer, there are no additional Account Opening charges for Commodity Derivatives Trading. As an introductory offer, till 31st Dec 2018, 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.
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.
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.