Description/ Specification of Commodity Trading/advisory services
Introduction: The commodity market in India holds significant growth potential, driven by factors such as increasing demand for raw materials, rising global trade, and technological advancements. As the economy continues to expand, the commodity market is expected to play a crucial role in facilitating price discovery and risk management for market participants. In India commodities traded comprises of base metals precious metals, Oil & gas, Power, and agricultural products like rice, cotton, sugar, pulses, oil & oilseeds, spices, vegetables etc. Description Of commodity market: Basically, commodity trading involves buying a commodity at a certain price and selling it when the price rises. one does not need to invest here physically to participate in commodity trading. Instead, they can invest here with ETFs or future contracts. Commodity trading takes place through online trading channels. Commodity exchanges provide the platform for trading, while brokers facilitate transactions on behalf of clients. The market operates through 4 No of exchanges namely Indian Commodity Exchange, Multi Commodity Exchange of India, National Commodity, and Derivative Exchange and National Multi Commodity Exchange of India. : In India, commodity markets are governed by Securities & Exchange Board of India(SEBI). SEBI oversees the operation of these exchanges and provides the regulatory framework for trading and protection of interests of all stake holders like Traders, Brokers. Institutions, and retail investors. The trade timings of commodity exchange from Monday to Friday are IST 10:00 AM to 11.30 PM . Traders pay commodity transaction tax (CTT) . In the commodity sector, GST is paid on brokerage on physical delivery of goods and on exchange charges and warehouse charges. There is also a stamp duty. Procedure : To participate in commodity trading in India, investors need to open a trading account with a registered broker and comply with the regulatory requirements. The trading process involves placing orders through the trading platform provided by the exchange, which are then matched with corresponding buy or sell orders. Settlement of trades occurs through the exchange's clearinghouse, which ensures the meeting of contractual obligations. Opportunities and Risks to consider: 1. Commodity trading is ahigh volume low margin trading. One can leverage the trade to earn huge profits by investing relatively less amount. 2. Commodities have an inverse relationship with equity shares and bonds. Therefore, investors can protect their risks in those markets by hedging with commodities. 3. Commodities are very volatile in nature and their price fluctuates due to several factors like demand-supply, Logistics, Natural calamity, war, epidemic , technological disruptions to name only a few. Therefore, they are very risky investment by nature and only well informed and skilled investors can get success in these markets. Conclusion: The future of commodity trading in India is likely to be shaped by technological innovations, globalization trends, and policy reforms. Advancements in trading technology, such as algorithmic trading and blockchain-based platforms, are expected to enhance market efficiency and transparency. Integration with global markets through initiatives such as international commodity exchanges and cross-border trading arrangements could further deepen liquidity and expand trading opportunities. Commodity trading in India offers significant prospects and opportunities for investors, driven by the country's economic growth, diverse commodity base, and regulatory reforms.
Commodity Trading/advisory services
Introduction: The commodity market in India holds significant growth potential, driven by factors such as increasing demand for raw materials, rising global trade, and technological advancements. As the economy continues to expand, the commodity market is expected to play a crucial role in facilitating price discovery and risk management for market participants. In India commodities traded comprises of base metals precious metals, Oil & gas, Power, and agricultural products like rice, cotton, sugar, pulses, oil & oilseeds, spices, vegetables etc. Description Of commodity market: Basically, commodity trading involves buying a commodity at a certain price and selling it when the price rises. one does not need to invest here physically to participate in commodity trading. Instead, they can invest here with ETFs or future contracts. Commodity trading takes place through online trading channels. Commodity exchanges provide the platform for trading, while brokers facilitate transactions on behalf of clients. The market operates through 4 No of exchanges namely Indian Commodity Exchange, Multi Commodity Exchange of India, National Commodity, and Derivative Exchange and National Multi Commodity Exchange of India. : In India, commodity markets are governed by Securities & Exchange Board of India(SEBI). SEBI oversees the operation of these exchanges and provides the regulatory framework for trading and protection of interests of all stake holders like Traders, Brokers. Institutions, and retail investors. The trade timings of commodity exchange from Monday to Friday are IST 10:00 AM to 11.30 PM . Traders pay commodity transaction tax (CTT) . In the commodity sector, GST is paid on brokerage on physical delivery of goods and on exchange charges and warehouse charges. There is also a stamp duty. Procedure : To participate in commodity trading in India, investors need to open a trading account with a registered broker and comply with the regulatory requirements. The trading process involves placing orders through the trading platform provided by the exchange, which are then matched with corresponding buy or sell orders. Settlement of trades occurs through the exchange's clearinghouse, which ensures the meeting of contractual obligations. Opportunities and Risks to consider: 1. Commodity trading is ahigh volume low margin trading. One can leverage the trade to earn huge profits by investing relatively less amount. 2. Commodities have an inverse relationship with equity shares and bonds. Therefore, investors can protect their risks in those markets by hedging with commodities. 3. Commodities are very volatile in nature and their price fluctuates due to several factors like demand-supply, Logistics, Natural calamity, war, epidemic , technological disruptions to name only a few. Therefore, they are very risky investment by nature and only well informed and skilled investors can get success in these markets. Conclusion: The future of commodity trading in India is likely to be shaped by technological innovations, globalization trends, and policy reforms. Advancements in trading technology, such as algorithmic trading and blockchain-based platforms, are expected to enhance market efficiency and transparency. Integration with global markets through initiatives such as international commodity exchanges and cross-border trading arrangements could further deepen liquidity and expand trading opportunities. Commodity trading in India offers significant prospects and opportunities for investors, driven by the country's economic growth, diverse commodity base, and regulatory reforms.
