List of Commodities Articles

The last decade has witnessed a boom in commodity trading. The ease of this form of trading has also improved by leaps and bounds. Investors are not only viewing commodities as hedging instruments but also as a tool to assist in diversification. Let’s understand commodities, their trading, and the boons and banes.

The investment market in India is an exciting one for an investor looking to make profits. One can invest in multiple financial products such as equities, FDs, Mutual funds etc.

In India, the Commodities Market is fairly untapped and underdeveloped. Owing to the risk involved and the cyclical nature of commodities, investors refrain from venturing into this segment.

Diversification is the ultimate goal of any investor based on specific risk tolerating asset classes. Among numerous investment avenues, almost every risk-allocated portfolio has investments in commodities as they have an inverse relationship with equities and bonds.

The Indian financial market offers numerous ways, apart from equity, to invest, diversify and ensure a positively healthy portfolio. One such method is commodity trading.

The last decade has witnessed a boom in commodity trading. The ease of this form of trading has also improved by leaps and bounds. Investors are not only viewing commodities as hedging instruments but also as a tool to assist in diversification. Let’s understand commodities, their trading, and the boons and banes.

The investment market in India is an exciting one for an investor looking to make profits. One can invest in multiple financial products such as equities, FDs, Mutual funds etc.

In India, the Commodities Market is fairly untapped and underdeveloped. Owing to the risk involved and the cyclical nature of commodities, investors refrain from venturing into this segment.

Diversification is the ultimate goal of any investor based on specific risk tolerating asset classes. Among numerous investment avenues, almost every risk-allocated portfolio has investments in commodities as they have an inverse relationship with equities and bonds.

How do you invest in commodities? Can you really invest in commodities in commodities in the first place?

The Indian financial market offers numerous ways, apart from equity, to invest, diversify and ensure a positively healthy portfolio. One such method is commodity trading.

NCDEX and MCX were formed and became active exchanges for trading in commodities in 2003. In a way, NCDEX and MCX operate like the stock exchanges; the only difference being that they deal in commodities rather than in stocks and equity indices. Both the NCDEX and the MCX were regulated by the Forward Markets commission (FMC) till 2016. In the Union Budget 2016, the government decided to merge the FMC into SEBI and since then the two principal commodity exchanges viz. the NCDEX and the MCX have been regulated by SEBI. Let us first look at some key principles on which both the commodity exchanges operate.

MCX or the Multi Commodity Exchange of India Ltd is a commodity exchange started by the Government of India in 2003. It is India’s biggest derivatives exchange, where commodities are traded in futures and options.

CTT shall be levied on non-agricultural commodities futures contracts at the same rate as on equity futures that is at 0.01% of the price of the trade

One of the most interesting things to understand is how commodity market works. When we talk of the working of commodity market, we must understand that there are two distinct markets viz. the spot market and the derivatives market.