WHAT IS STOCK MARKET AND HOW TO INVEST IN ONLINE COMMODITY MARKET

If you are a stock market enthusiast then you would probably want to know about the details of the stock market and how to invest in it? Well, you have landed in a perfect place to look for the answers. There is a dedicated community in every corner of the world where people indulge in a form of business where people do commodities exchange to earn profit. If you too want to indulge in such activities then you would need to learn about the online commodity market in details. Gathering knowledge and utilizing such information in practice is the only way you can make some money in the stock market.

WHAT EXACTLY IS STOCK MARKET AND HOW TO INVEST IN ONLINE COMMODITY MARKET? 

A stock market is basically a place or an institution where people from every corner of the world indulge in buying and selling of commodities, shares of numerous companies. Usually, the public limited companies around the world offer their shares to the world in form of Initial Public Offerings (IPO) in order to accumulate money from the market. These shares are then bought by individuals, companies as well as brokers who in turn sell or buy those shares. This process is continuously going on in a loop where someone is buying and someone is selling.

The unit value of a company’s stock is called shares. The stock is basically a legal tender or security depicting the state of ownership of a buyer in a particular company. The stocks thus are also come to known as equity. Practically anyone who has a Trading account can indulge in the process of buying and selling of commodities in the stock market. So, if you are interested in doing so then you would need to have your own DEMAT account.

INVESTING IN ONLINE COMMODITIES MARKET

Commodities are basically the essential materials which are used to make other valuable products. For example, precious metals such as gold, copper, and silver and then there are agricultural commodities like wheat and corn. Then there are energy based commodities such as crude oil and natural gas. There are many other commodities available where one can invest in order to gain profits.

These things are always in demand within as well as outside the country. Those countries who are rich in these commodities export it to the other countries. Since there is a constant demand for such commodities in and around the world, hence the value of these items also fluctuates a lot. A broker, as well as individuals, utilizes such opportunities to buy and sell the commodity securities to make some money.

If you really are interested in undergoing the phenomenon then you will have to know how to invest in the commodities. It is the only way you are going to make profits or else you will have to face the loss.

Read more- WHAT MECHANISM FOLLOWED BY INDIAN COMMODITY MARKET

So, here are the initial steps that you need to take in order to invest in online trading commodities.

1. FIND A BROKER

In order to invest in the online commodity market, you will need to get in touch with a broker. In the country like India, the stock market is regulated by the Securities and Exchange Board of India (SEBI). The SEBI does not allow any individual to invest in the commodity market directly. Hence, you would need a broker in order to carry on with the process. A broker can be anyone, a person or a brokerage firm or a bank provided they will have to be registered with SEBI.

2. OPEN A DEMAT ACCOUNT

Earlier the stockbroking was done in a manual order where people used to keep track of all the paper documents, securities, and certificates. This process is going obsolete these days and everything is done online. DEMAT is which an acronym of Dematerialization basically means the process to convert physical certificates into an electronic format. Every trade that you indulge into in the stock market will have its data stored in your DEMAT account. This account will basically hold stocks for you.

3. DECIDE HOW MUCH YOU WANT TO INVEST

Investing in the commodity market is a very risky thing to do. The losses occur in the stock market is the same as that of profits. It is a full-time job, analyzing and gathering information about a stock or a commodity. People have said to lost everything in the stock market just because they didn’t know when to stop investing. Hence, it is a very important thing to understand that you will need to be cautious, especially if you are a beginner. Here is the beginner guide for online commodity market.

4. HIRE A FINANCIAL ADVISOR

Knowing about your flaws and understanding them at a right moment is a very crucial thing to do in the commodities market. If you are facing difficulties in understanding the process then you should be willing to hire an advisor. There are some of the best and qualified professionals out there who can help you out with it.

You may also like to read- WHAT ARE THE MUST FOLLOW RULES OF INVESTING IN ONLINE 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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