Liquidity doubt in commodity

#1
Hi,

Iv'e been trading in equity futures for the past 1 year and has always wanted to trade in commodity futures.

I wanted to know about liquidity in commodity. Is it worse, better or same compared to stocks? I have always found the liquidity in stock futures satisfactory (which might go down after SEBI's new move to strongly increase lot size's and margin's) which was around spread points of max thousand rupees equivalent.

If liquidity is good, is it good in all commodities or only in heavyweights like gold and oil.

Also is entry into commodity futures trading as easy as it is in equity futures.

Your reply would be much appreciated.

Thanks
Sam
 

ashu1234

Well-Known Member
#2
Welcome to commodities....
Liquidity is great here. Average daily turnover here is 20,000+ crore as of last year(Oct 2014), which exceeds NSE so nothing more to say.

Now about trading, Gold, Oil and Silver are very liquid. Base metals are liquid too, natural gas is liquid mostly at US open. Moves are on through out the day but sometime on non events it gives hard time to watch but that's ok, happens with stocks or Nifty too...Current month and Next month contract are fairly traded, contract chain is open upto six month but most of the action is only for current and next month coz most contracts are settled in cash except gold and silver.

Forgot to tell you that tick to tick liquidity is there(unlike stock futures where it may not be present) most of the time except at heavy volatility time where prices may jump.
 

natjay

Well-Known Member
#3
I have 3 questions about commodity trading that I hope an experienced trader here can answer:

1. What's a good broker for a beginner in commodity trading to open an account with?

2. Are discount platforms like NEST / Pi / Kite good enough for MCX trading (specially in Crude oil, Silver & Zinc) or should I look elsewhere for better platforms?

3. Do you spend anything extra for buying third-party commodity data feeds, or are the feeds from your broker good enough for trading live?

Thanks in advance for your help.
 

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