Commodity trading opens a wide option of trading in the organized marketplace. Now, investors can trade in various products such as gold silver, Grain, electricity, oil, juice, beef and natural gas. Basically, Commodities split into agricultural (soft commodities) and non- agricultural commodities (hard commodities). Agricultural commodities includes wheat, rice, soybeans and cotton recognized for yielding different returns based on their seasonal cost fluctuations. Apart from it, energy resources include natural gas and crude oil signifies another class of assets in non-agricultural commodities. While samples of the commodities are always physically examined and rated, physical delivery of the commodity hardly take place because the delivery contracts are generally exchanged or traded out by their expiration date.
Although, there are numerous commodity exchanges but there are two major commodity exchanges through which most of the trading can be done by investors. These two exchanges are NCDEX (National Commodity & Derivatives Exchange Ltd.) and MCX (Multi Commodity Exchange) which allow electronic commodities trading. NCDEX and MCX offer a platform for futures trading in a number of agricultural and non-agricultural commodities. We, Sharebazaarlive is associate of both the commodity exchanges in India and reputed for providing quality services for both small and large investors.
Therefore, while investing in commodities kindly keep in mind the current market trends and alongside, pay special attention to seasonal patterns especially while commerce with agricultural commodities. Interestingly, gold remains as the nice investment option to make a reliable long-term investment in commodity market.
Moreover, one can trade in commodities market by hedging, speculating and arbitraging. Hedging works as reducing your risk of losing money in the future by adopting a future position against the current market position for a commodity. Speculation is simply based on expectation of future price change based on experience or assumption for an agricultural commodity, for instance. Without the need for delivery and storage, one can gain by adopting a position based on understanding of price changes for a commodity. Arbitraging is a much safer method of dealing in commodities which involves buying commodity in one market and selling it in another market. This involves lesser risk and one can gain by taking advantage of arbitrage opportunities created by different rates in different markets or due to the difference between spot and forward markets.
At Sharebazaarlive, we offer you expert assistance to make the best decision possible while trading in commodities market.