Explain Commodity Trading in India and Benefits

A commodity is a group of assets that are important to support our lives like metals, food, energy... In India, there are four classified categories of commodities.

Commodities are the most essential natural resources that can be traded in the market, they can be purchased and sold just like the stocks. The prices of commodities vary widely, which makes them a highly volatile investment option. Anyone with a commodity trading account can enter the market by making a bid or asking prices.

Commodity is a kind of asset which helps us in our day to day life, like metals, food, energy etc., which can be traded through commodity exchange and get price changes as per market trend what is commodity in share market.

Commodities are bound with our lives. They can directly or indirectly influence our living standards. Many of us are dependent on commodity trading for bringing us required wealth and prosperity. The biggest advantage of commodities is that they can act as hedges against inflation, thereby preserving the wealth and value of investors. A good investor will always try to find out ways to diversify their investment portfolio by investing in equity, debt, and commodities. China's dominance as a trade partner of the world has stirred up global demand for oil, agricultural products, and other basic materials

Commodity trading refers to the buying and selling of commodities for the purpose of speculative gain. They are derived from Economic data, weather conditions or breaking news You must have a basic understanding of commodities before entering the Commodity market

The commodities, which are tradable on exchanges in India, are metals, energies and agricultural commodities. Metals include precious and nonferrous metals like gold, silver, aluminium, etc. The Energy group includes crude oil and natural gas. Agricultural commodities include coffee, cocoa beans and cotton among others.

Commodity markets are the markets where raw or primary products are exchanged. These raw commodities are traded on regulated commodities exchanges, in which they are bought and sold in standardised contracts. Commodity trading involves the buying and selling of these types of physical substances through commodity exchanges.

One can trade in the commodity market through a futures contract. This is a type of contract, where one agrees to buy or sell a specific quantity of a commodity at a future price. Every commodity is available for trading through the futures market. Traders are required to take their position, depending upon predicted price movements. For example, if the trader expects the price of a commodity to go up, he would purchase a specific quantity of the commodity and go long. Similarly, if the trader expects the price of the commodity to go down, the trader sells a specific quantity of the commodity and goes short.

You can trade through the commodity online market through a futures contract. In this type of contract, you enter into an agreement to buy or sell a specific amount of the commodity at a future price. Every commodity is available for trading through the futures market. The traders, depending on their expected price movements, take their position. For example, if the trader expects the price of a commodity to rise, he would buy a specific amount of that commodity and go long. Similarly, if the trader expects the price of a commodity to fall, the trader will sell a specific amount of that commodity and go short.