Introduce beginners to commodities

veluri1967

Well-Known Member
#1
Dear Friends,
I am new to Commodity Trading. I donot know ABC of it.
I would like to know everything about it.
If anyone who knows about it share the following info, i would be grateful.

1.Opening of Trading Account. (I have a stock trading a/c with indiabulls and am active in share trading).
Timings of Commodity Trading. (For Stocks it is from 09:55 AM to 03:30 PM from Monday to Friday).
2. Glimpse of Trading Terminals.
3. Types of Commodities we can trade.
4. Order placements (like Cash segment of Shares or Futures)
5. Margin Money Requirements.
6. Brokerages prevailing in Commodity Trading including invisible levies if any.
7. Is it suitable for intraday trading or only positional trading.
8. Settlement periods.
9. Ways of Settlement and Pay out/Pay in procedures. Delivery procedures.
10. Lot sizes.
11. Any other information I should know before leaping into commodities
 
Last edited:
#3
same here ya..i would expect seniors to just show us the direction..rest we will burn our hands and learn... No learning without burning... Just show us where and how to start...
 

alroyraj

Well-Known Member
#5
Dear Friends,
I am new to Commodity Trading. I donot know ABC of it.
I would like to know everything about it.
If anyone who knows about it share the following info, i would be grateful.

1.Opening of Trading Account. (I have a stock trading a/c with indiabulls and am active in share trading).
Timings of Commodity Trading. (For Stocks it is from 09:55 AM to 03:30 PM from Monday to Friday).
2. Glimpse of Trading Terminals.
3. Types of Commodities we can trade.
4. Order placements (like Cash segment of Shares or Futures)
5. Margin Money Requirements.
6. Brokerages prevailing in Commodity Trading including invisible levies if any.
7. Is it suitable for intraday trading or only positional trading.
8. Settlement periods.
9. Ways of Settlement and Pay out/Pay in procedures. Delivery procedures.
10. Lot sizes.
11. Any other information I should know before leaping into commodities
1.Opening of trading account:
For Indiabulls: 500 for a/c opening + 1000 for Odin Diet
Timings of Commodity Trading
NCDEX ,NMCE and MCX Timings
Normal Market Open Time (Mon - Fri) : 10- 23:30
Normal Market Open Time (Sat) : 10:00 -14:00 hrs.

2. Glimpse of Trading Terminals
Same as Odin used in brokerages.

3. Types of Commodities we can trade.


Gold

Gold Guinea
Gold HNI
Gold M
Platinum
Silver
Silver HNI
Silver M

Metals
Aluminium
Copper
Lead
Mild Steel Ingot,Billets
Nickel
Tin
Zinc

Energy
ATF
Crude Oil
Electricity Monthly & Weekly
Gasoline
Heating Oil
Imported Thermal Coal
Natural Gas


Oil & Oil Seeds
Castor Seeds
Crude Palm Oil
Kapasia Khalli
Refined Soya Oil
Soya Bean

Plantations
Rubber

Others
Almond
Gaur Seed
Melted Menthol Flakes
Mentha Oil
Potato (Agra)

Pulses
Chana

Cereals
Barely
Wheat
Maize-Feed / Industrial Grade

Weather
Carbon (CER)
Carbon(CFI)

Fiber
Cotton M Staple
Kapas

Spices
Cardamom
Coriander
Turmeric

4. Order placements (like Cash segment of Shares or Futures)
It is the same. Both segments are available.

5. Margin Money Requirements.
As in stocks, in commodities also the margin is calculated by (value at risk) VaR system. Normally it is between 5 per cent and 10 per cent of the contract value.

The margin is different for each commodity. Just like in equities, in commodities also there is a system of initial margin and mark-to-market margin. The margin keeps changing depending on the change in price and volatility.

6. Brokerages prevailing in Commodity Trading including invisible levies if any.
The brokerage charges range from 0.10-0.25 per cent of the contract value. Transaction charges range between Rs 6 and Rs 10 per lakh/per contract. The brokerage will be different for different commodities. It will also differ based on trading transactions and delivery transactions. In case of a contract resulting in delivery, the brokerage can be 0.25 - 1 per cent of the contract value. The brokerage cannot exceed the maximum limit specified by the exchanges.

7. Is it suitable for intraday trading or only positional trading.
For both. Suitable for intraday because of higher trading sessions. Positional also possible. Typically people dont carry their position over to the next day.Important is the commodity broker since typically he has to observe several indicators as and when they are released and report to the client.

8. Settlement periods.
You can do both delivery and cash settlements. All the exchanges have both systems - cash and delivery mechanisms. The choice is yours. If you want your contract to be cash settled, you have to indicate at the time of placing the order that you don't intend to deliver the item.

If you plan to take or make delivery, you need to have the required warehouse receipts. The option to settle in cash or through delivery can be changed as many times as one wants till the last day of the expiry of the contract.
If you are not a hedger better to settle in cash.
All contracts settling in cash would be settled on the following day after the contract expiry date. All contracts materializing into deliveries would settle in a period of 2-7 days after the expiry. The exact settlement day would be specified for each commodity.

9. Ways of Settlement and Pay out/Pay in procedures. Delivery procedures.
Additional info. http://www.nicrindia.com/wfrmFaq.aspx
http://www.tradingpicks.com/beginners_guide.htm
 
Last edited:

veluri1967

Well-Known Member
#6
1.Opening of trading account:
For Indiabulls: 500 for a/c opening + 1000 for Odin Diet
Timings of Commodity Trading
NCDEX ,NMCE and MCX Timings
Normal Market Open Time (Mon - Fri) : 10- 23:30
Normal Market Open Time (Sat) : 10:00 -14:00 hrs.

2. Glimpse of Trading Terminals
Same as Odin used in brokerages.

3. Types of Commodities we can trade.


Gold

Gold Guinea
Gold HNI
Gold M
Platinum
Silver
Silver HNI
Silver M

Metals
Aluminium
Copper
Lead
Mild Steel Ingot,Billets
Nickel
Tin
Zinc

Energy
ATF
Crude Oil
Electricity Monthly & Weekly
Gasoline
Heating Oil
Imported Thermal Coal
Natural Gas


Oil & Oil Seeds
Castor Seeds
Crude Palm Oil
Kapasia Khalli
Refined Soya Oil
Soya Bean

Plantations
Rubber

Others
Almond
Gaur Seed
Melted Menthol Flakes
Mentha Oil
Potato (Agra)

Pulses
Chana

Cereals
Barely
Wheat
Maize-Feed / Industrial Grade

Weather
Carbon (CER)
Carbon(CFI)

Fiber
Cotton M Staple
Kapas

Spices
Cardamom
Coriander
Turmeric

4. Order placements (like Cash segment of Shares or Futures)
It is the same. Both segments are available.

5. Margin Money Requirements.
As in stocks, in commodities also the margin is calculated by (value at risk) VaR system. Normally it is between 5 per cent and 10 per cent of the contract value.

The margin is different for each commodity. Just like in equities, in commodities also there is a system of initial margin and mark-to-market margin. The margin keeps changing depending on the change in price and volatility.

6. Brokerages prevailing in Commodity Trading including invisible levies if any.
The brokerage charges range from 0.10-0.25 per cent of the contract value. Transaction charges range between Rs 6 and Rs 10 per lakh/per contract. The brokerage will be different for different commodities. It will also differ based on trading transactions and delivery transactions. In case of a contract resulting in delivery, the brokerage can be 0.25 - 1 per cent of the contract value. The brokerage cannot exceed the maximum limit specified by the exchanges.

7. Is it suitable for intraday trading or only positional trading.
For both. Suitable for intraday because of higher trading sessions. Positional also possible. Typically people dont carry their position over to the next day.Important is the commodity broker since typically he has to observe several indicators as and when they are released and report to the client.

8. Settlement periods.
You can do both delivery and cash settlements. All the exchanges have both systems - cash and delivery mechanisms. The choice is yours. If you want your contract to be cash settled, you have to indicate at the time of placing the order that you don't intend to deliver the item.

If you plan to take or make delivery, you need to have the required warehouse receipts. The option to settle in cash or through delivery can be changed as many times as one wants till the last day of the expiry of the contract.
If you are not a hedger better to settle in cash.
All contracts settling in cash would be settled on the following day after the contract expiry date. All contracts materializing into deliveries would settle in a period of 2-7 days after the expiry. The exact settlement day would be specified for each commodity.

9. Ways of Settlement and Pay out/Pay in procedures. Delivery procedures.
Additional info. http://www.nicrindia.com/wfrmFaq.aspx
http://www.tradingpicks.com/beginners_guide.htm
I am grateful to you.:thanx:
 

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