Commodity market works on the similar principle of the usual market where people can buy and sell commodities same day for gaining some good profits. It’s a virtual space where you can easily get familiar with the market trends according to which you make an investment earning the profits improving your business set up.
Strategies to Use
You can use a future contract trading where there would be an agreement between the buyer and seller where the buyer has to pay the amount as agreed at the time of the transaction. The amount is paid after the seller delivers the specific commodity on the decided date in future. Now, you have to choose the commodities that help you to manage higher finances making you feel confident.
Commodities used in future trade include:
- Agricultural products like wheat, rice, corn etc.
- Natural resources like crude, gas, oil etc.
So, you can opt for the right one knowing that you can keep a good pace with the market trends that aid you to manage the facets without any worries.
In India there are six commodity exchanges:
- Multi Commodity Exchange (MCX)
- National Commodities and Derivatives Exchange (NCDEX)
- National Multi Commodity Exchange
- ACE Derivatives Exchange
- Indian Commodity Exchange
- Universal Commodity Exchange
Since 2015 SEBI is the regulatory body of all these exchanges ensuring that all investors can do a safe business. An investor now can make a successful investment using bourses that help the person to comprehend the features in the right way. It’s always important to learn the diversities of the market helping you to get access to all real-time benefits. In addition, you can explore cross commodity options trading where you can maintain a balance with the trading features of other countries helping you to do a smarter trade.
If the price goes up by 2% your investment increases by 20% whereas if the price goes down by 2% your profit is affected by 20%. On the other hand, if you have sold a certain number of commodities you would make a profit of 20% if the price lowers by 2% and your investment goes down by 20% if the price gets a hike of 2%.
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