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What is Commodity Market?

A place where all primary products are exchanged is known as commodity market. This market includes direct physical and derivatives trading as a form of spot prices, futures and options, forwards.

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What is Commodity Market?

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  1. What is Commodity Market? A place where all primary products are exchanged is known as commodity market. This market includes direct physical and derivatives trading as a form of spot prices, futures and options, forwards. Before start investing in commodity market investor should have complete basic knowledge on it.

  2. Commodity Market: the basic point is that it deals in economic sector rather than manufactured products. • Mainly there are two type of commodities soft commodities and hard commodities. • In Soft Commodities agriculture product comes like wheat, cocoa, sugar, coffee. • In hard commodities include mined like gold and oil.

  3. The Government of India permitted initiation of National-level Multi-Commodity exchanges in the year of 2002 -2003 and according to this following exchanges have come into picture. They are • Multi-Commodity Exchange of India Ltd, Mumbai (MCX). • National Commodity and Derivatives Exchange of India, Mumbai(NCDEX). • Indian Commodity Exchange (ICEX) • National Multi Commodity Exchange, Ahmadabad(NMCE). • This commodity exchange is regional commodity exchanges and also functioning all over the country.

  4. Hedging:Against the exposure towards physical trades -for risk management. Speculation:Having no exposure in physical form.

  5. Now the point comes in every new trader mind How to trade in commodities: Investors trade in commodities in the form of indexed futures contracts. Futures contracts: It is a systematize contract which amounts to an agreement to sell or buy a specified capital of standardized quality and quantity at a specified future date (which is known as the contract’s “expiry date”) at a cost agreed today (the futures price).

  6. One of the most important factors in this market is commodity indices? Commodity Index is a exact or average of selected commodity prices. This may be based on future price or spot price. Basically spot price of a particular commodity is current prevailing market cost of that commodity being quoted for immediate settlement. The purpose of design commodity index is to representative of the board commodity capital class, subset of commodities like metal or energy and to track an individual single commodity like gold.

  7. Contact Us Trade India Research, 308, • KanchanSagarAppartment, • Near Industry House, • Indore-452001, M.P. India. • +91-7415033556 info@tradeindiaresearch.com

  8. Thank You So Much For Your Precious Time

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