List of Commodities Articles

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.

The stock market is a preferable choice for most investors. However, there is a completely different asset class that knowledgeable investors prefer to trade and earn hefty profits: commodity trading.

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.

One of the key difference between equity and commodity is that one is more hedge or underlying driven and the other is more of trade driven.

India’s rapid economic growth has fueled an insatiable demand for oil and petroleum products as the world’s third largest oil consumer on the side of the US and China. India’s energy needs are met through a combination of domestic production and imports. This article analyses the crucial role played by upstream and downstream oil companies in satisfying India’s oil appetite today and powering future growth. […]

In India, there are two principal commodity exchanges, viz. the Multi Commodity Exchange (MCX) and the National Commodity and Derivatives Exchange (NCDEX). While the MCX is the clear leader in non-agricultural commodities like bullion, crude oil, and industrial metals, NCDEX leads in agricultural commodities 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.

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.

The commodities market is a preferred platform for trade for some investors. However, before delving into the trading instruments available in a commodity market, it’s important to understand the definition of a “commodity” in this form of trading.

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

You can buy commodities in the spot market as well as the futures market. For example, you can either buy gold in the spot market and take delivery, or you can buy gold in the futures market and decide about the delivery before expiry.

One of the key difference between equity and commodity is that one is more hedge or underlying driven and the other is more of trade driven.

Unlike equities, indices and currencies, the futures in commodities are physical in nature. Normally, commodity futures are used as tools of hedging underlying risk.

One of the most important factors that experienced investors swear by is not putting all of your eggs in one basket.

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.