Why Invest in Commodities
  • Physical Ownership of Goods
  • Portfolio Diversification (don’t put all eggs in one basket). Also, it is generally believed that commodities and equity markets are inversely related. Thus, commodities offer a great diversification in a falling equity market and vice versa.
  • Hedge against inflation. Inflation first manifests itself in commodity prices. Thus, trading in commodities may be a good hedge against inflation.
  • Commodities such as Gold and Crude are directly linked with the prevailing economic and political environment in the world and are fancied by investors in time of uncertainty.
Products Available in India
  • Energy Related Contracts (Crude / Natural Gas)
  • Bullion (Gold and Silver)
  • Base Metals (Lead, Nickel. Copper, Aluminum and Zinc)
  • Agri Products
Contract Types
  • Futures
  • Options (including Options on Futures)
  • Index products for Energy, Metals and Bullion
  • Index Options (coming soon)
  • How to Start Trade in Commodities?
  • How Do I Get Ownership of Commodities?
  • How to Trade Commodities?

Activate Commodity Segment with the broker. This is a simple process and does not require any additional paperwork. Consent is taken with a easy OTP based process.

Commodity Derivatives can be traded for both physical delivery or for cash settlement of profits (or losses).

The market timings are from 9 am to 11:30 pm (check). This allows market participants a bigger trading window to trade on international news and events.

Commodity markets have been known for illiquid pricing, issues in trade settlement and challenges in managing physical stock. The exchange platform offers efficient price discovery, liquidity and timely settlement of trades. The warehousing and ownership process discussed below takes away the challenges and headaches of physical ownership of a commodity.

Commodities require specialized storage, depending on the nature of the commodity. Precious metals require a high degree of security against theft. Energy products have to be protected against fire. Agri products need to protection against rodents and moisture and other degradation. The commodities are stored in specialized ware houses specifically designed keeping in mind the needs for a particular commodity. The owner is issued a ware house receipt. This receipt is held in demat form and can be traded, split and consolidated and used as collateral for finance. At any time, the owner of the ware house receipt can surrender the receipt and take physical possession of the underlying commodities.

Commodity markets are for types of market participants. Hedgers may use the market to mitigate risk in their respective underlying businesses and thus protect the business from various risks. Speculators and trades with a strong fundamental or technical view of the market may use the exchange platform for execution of the same. Risk averse arbitrageurs can arbitrage between cash and futures markets or across different time series contracts. The market also provides a easy and affordable way to trade in commodities such as crude that were earlier not available for most Indian investors, particularly retail participants.