GUIDE TO OPEN TRADING ACCOUNT IN COMMODITIES MARKET

People these days are getting widely aware of the online commodity markets and its phenomenon. It is for this reason that the world’s commodity market has seen a surge in the amount of investment from common people.

If you too consider yourself as a market-savvy person then this is the right place for you. People who have even a little bit of information as to how this thing works can easily make profits in no time.

People who have even a little bit of information as to how this thing works(HOW TO OPEN TRADING ACCOUNT IN COMMODITIES MARKET) can easily make profits in no time.

There are indeed lots of investment opportunities available for a person to invest their money in the commodity market. Commodities are one such option that can actually make you a profitable person.

All you need is to understand the process and gather all the information about how to make profit in intraday trading so as to invest in commodities.

GUIDE TO OPEN TRADING ACCOUNT IN COMMODITY

Commodities are the regular items or a raw material that is being used by the people as well as industries across the globe on daily basis. For example, metal, energy, agriculture, services and precious metals.

These can be further narrowed down to the individual products such as iron ore, copper, zinc in case of metal, Wheat, rice or corn in case of agro products and crude oil, natural gas or coal in case of energy.

There are a vast number of classifications under commodities that are being used for various purposes in order to meet the day-to-day need of people and industries.

If you want to invest in commodities then you would need to understand the basic fundamentals of demand and supply of the commodities. It is probably the only way by which you can earn some profits.

TRADE IN COMMODITIES

Even though the trade in commodities is done online these days but it was not the same as always. The conventional method to trade in commodities involved physical exchange of goods and services from one another.

However, the technological advancement has now made it an easier thing to trade in commodities. All you need is a trading account and a broker to trade in commodities. You do not need to go anyplace else in order to do so.

Now since everything is done online, the commodities trade is also done online over commodities exchange in dematerialized form. The profits or loss that you make by trading is done electronically without the need for any kind of physical involvement.

So, if you really are interested in to earn profit then you would need to open a commodity trading account. It is basically a Trading account that has to be opened with a broker. Without the access to a trading account, you will not be able to trade in commodities.

Now, most people would ask what the need of a broker is. Well, the commodities market does not allow an unregistered individual or a company to trade freely in the market as per the regulation of regulatory authority SEBI.

Since you are an unregistered person, you will need to get in touch with someone who is already registered so that you can invest in commodities.

OPENING A COMMODITY TRADING ACCOUNT

Now since you need a broker to open a commodity Trading account with, you will get two options. Either you can go with the banks or you can approach a licensed stockbroker. 

If you are at the beginner stage and know less about the commodities market then it is advisable to reach out to a brokerage firm.

They are the ones who usually offer more services and guidance when it comes to investing in the online commodity market.

The next thing would be to open a Trading account. It is a pretty simple job. If you have got in touch with a broker then they will do the work for you in opening an account.

And if you have approached a bank then you will need to fill out an application form, pay the requisite application fees, and submit proper documents and you are good to go. With banks, it usually takes up to a week to open a Trading account with them.

The best part about opening Trading account these days is that you can even do this online. All you need is to visit the official website of the broker with whom you are going to open an account with and then fill out the online application form. After the verification process is done, you can then start trading in commodities in no time.

The only thing that you will need to keep in mind before reaching out to any broker is to check for its credentials. It is better to opt for the best because of the wide range of services and technological benefits.

There are firms and companies in the market who has their own benefits and drawbacks to look into. Reaching out for an inexperienced broker might result in loss of money.  So, before approaching anyone, make sure that you have to go through their profile thoroughly before taking any steps.

READ ALSO – WHAT ARE THE MUST FOLLOW RULES OF INVESTING IN COMMODITY MARKET

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It is, therefore, important to learn both the pros and cons of intraday trading to get a better idea of how this market works and how exactly you can grow your money. In this post, we will walk you through a few advantages and disadvantages of intraday trading. So, keep reading to learn more.

• Beware of fixed/guaranteed/regular returns/ capital protection schemes. Brokers or their authorized persons or any of their associates are not authorized to offer fixed/guaranteed/regular returns/ capital protection on your investment or authorized to enter into any loan agreement with you to pay interest on the funds offered by you. Please note that in case of default of a member claim for funds or securities given to the broker under any arrangement/ agreement of indicative return will not be accepted by the relevant Committee of the Exchange as per the approved norms.
• Ensure that pay-out of funds/securities is received in your account within 1 working day from the date of pay-out.
• Be careful while executing the PoA (Power of Attorney) – specify all the rights that the stock broker can exercise and timeframe for which PoA is valid. It may be noted that PoA is not a mandatory requirement as per SEBI / Exchanges.
• Register for online applications viz Speed-e and Easiest provided by Depositories for online delivery of securities as an alternative to PoA.

• Do not keep funds idle with the Stock Broker. Please note that your stock broker has to return the credit balance lying with them, within three working days in case you have not done any transaction within last 30 calendar days. Please note that in case of default of a Member, claim for funds and securities, without any transaction on the exchange will not be accepted by the relevant Committee of the Exchange as per the approved norms.

• Check the frequency of accounts settlement opted for. If you have opted for running account, please ensure that your broker settles your account and, in any case, not later than once in 90 days (or 30 days if you have opted for 30 days settlement). In case of declaration of trading member as defaulter, the claims of clients against such defaulter member would be subject to norms for eligibility of claims for compensation from IPF to the clients of the defaulter member. These norms are available on Exchange website at following link: NSE, MCX

• Brokers are not permitted to accept transfer of securities as margin. Securities offered as margin/ collateral MUST remain in the account of the client and can be pledged to the broker only by way of ‘margin pledge’, created in the Depository system. Clients are not permitted to place any securities with the broker or associate of the broker or authorized person of the broker for any reason. Broker can take securities belonging to clients only for settlement of securities sold by the client.

• Always keep your contact details viz. Mobile number/Email ID updated with the stock broker. Email and mobile number is mandatory and you must provide the same to your broker for updation in Exchange records. You must immediately take up the matter with Stock Broker/Exchange if you are not receiving the messages from Exchange/Depositories regularly.

• Don’t ignore any emails/SMSs received from the Exchange for trades done by you. Verify the same with the Contract notes/Statement of accounts received from your broker and report discrepancy, if any, to your broker in writing immediately and if the Stock Broker does not respond, please take this up with the Exchange/Depositories forthwith.

• Check messages sent by Exchanges on a weekly basis regarding funds and securities balances reported by the trading member, compare it with the weekly statement of account sent by broker and immediately raise a concern to the exchange if you notice a discrepancy.

• Please do not transfer funds, for the purposes of trading to anyone, including an authorized person or an associate of the broker, other than a SEBI registered Stock broker.

• Do not deal with unregistered intermediaries (who are not registered with SEBI/Exchanges).

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