Guide to Commodity Trading
Where do we need to go to trade in commodity futures?
There are 3 choices. All three choices mentioned below have electronic trading and settlement systems and a national presence.
1) The National Commodity and Derivative Exchange.
2) The Multi Commodity Exchange of India Ltd.
3) The National Multi Commodity Exchange of India Ltd.
How do I choose my broker?
Many established equity brokers have requested membership with NCDEX and MCX.
Commodity futures services are offered by:
1. Enrich Commodities India Pvt Ltd
We can also choose the broker from above of members from the exchanges.
What is the minimum investment needed?
The minimum amount can start from Rs 5,000.
We require money for margins payable upfront to exchanges through brokers.
The margins range from 5-10 per cent of the value of the commodity contract.
We can start trading at Rs 5,000 with Enrich Commodities .
Different brokers have different packages for clients.
Trading in bullion ( gold & silver )
The minimum amount required is Rs 650 and Rs 950 for on the current price of approximately Rs 65, 00 for gold for one trading unit (10 gm) and about Rs 9,500 for silver (one kg).
With reference to the prices and trading lots in agricultural commodities, it varies from exchange to exchange (in kg, quintals or tonnes).
The minimum funds required to begin will be approximately Rs 5,000.
I have to give delivery or settle in cash?
Exchanges have both options. The cash and delivery mechanisms are available. We can choose the options.
Cash settlement of contract:
We need to specify at the time of placing the order that we dont propose to deliver the item.
If we plan to take or make delivery, we need to have the required warehouse receipts.
The option to settle in cash or through delivery can be changed as many times as we want till the last day of the expiry of the contract.