Commodity trading is the buying, selling and trading of commodities. … A commodity derivative contract like futures and options derives its value from the underlying asset i.e. commodity. The underlying commodities are raw materials or primary goods such as wheat, gold, crude oil, etc.
How does commodity trading work?
Commodity futures are traded at a standardized future price. The buyer of a futures contract has the right and the obligation to buy the commodity at a predetermined rate in the future and the seller must sell the commodity at such prices.
How do I buy commodities?
You can start trading commodities by opening a brokerage account and purchasing shares in the commodity-specific company of your choice or a commodity ETF after you have done your research and determined the specific investments that are right for you.
5 Essential Steps For Traders To Start Commodity Trading
- Step 1 – Getting Familiar About The Commodity Trading Exchanges. …
- Step 2 – Selecting the Efficient Stockbroker. …
- Step 3 – Opening The Commodity Trading Account. …
- Step 4 – Making An Initial Deposit. …
- Step 5 – Create A Trading Plan.
Commodity Market Hours.
This excludes Saturdays and Sundays and holidays declared by the Exchange in advance and notified to the members of the exchange. The market timings of the commodity derivatives segment are: Normal Market Open: 09:00 hrs. Normal Market Close: 23:30 hrs