Below is the general procedure of starting commodity trading in India.
Commodity markets – where all raw or primary products are exchanged. These raw commodities are traded on regulated commodities exchanges, in which they are bought and sold in standardized contracts.
Commodities trading – Another form of investing in commodity products. It is similar to stock trading but instead of buying and selling shares of companies, Investor buys and sells commodity Products. Like stocks, commodities are traded on exchanges where buyers and sellers can work together to either get the products or to make a profit from the variable prices.
MCX – Multi Commodity Exchange of India Ltd is a state-of-the-art electronic commodity futures exchange. MCX was established in 2003 and based in Mumbai. It is the world’s sixth largest commodity trading exchange.
For more details on MCX India, please visit their official site www.mcxindia.com
For more details on commodity trading basics click here
Getting started with commodity trading:
- Choose Brokers – Many already established equity brokers have sought membership with MCX. Check out the list of commodity borkers here
- Minimum Investment Amount – The minimum investment amount is approximately Rs. 6, 000. It varies for different commodities. For example, if you want to trade on Mini gold (100g), you need approximately Rs. 8, 000/- and for Mini zinc, you need ~ Rs. 5, 500. But starting your trading with Rs. 10, 000 will be ideally good.
- Transferring money to trade – You can directly deposit to Brokers company account, Net-banking, Demand draft and cheques are all possible ways. Most of the brokers will allow all the above mentioned options, only few brokers have restricted cheques.
- Basic things to open trading account –
- Bank account
- PAN Card
- Address Proof
- Note: The brokers will charge Rs. 250 to 500 for opening the trading account.
- Basic needs for Trading – All you need is Internet connection and trading application. Don’t bother about trading application, brokers will install it to your computer and they will guide you to operate the platform, even brokers give you daily tips. But premium tips are always best and also you can gain more.
- Trading Time – MCX will open at 10 AM and will close at 11.30 PM. Within these times you can trade.
- Step by Step guide : how to open a commodity trading account in India
Happy and Safe trading.