How Does Online Commodities Trading Market Work?

How Does Commodity Trading Work?

Commodity trading in the global market is probably a very significant in the society as well as the economy of a country. Here, you will go through the explanation regarding how commodities trading exactly works and the best possible manner to deal with it in every sector.

A commodity trading is a very simple practice and it works just like any other trading market actually involving a virtual or a physical space, where one can trade easily by purchasing or selling different commodities at present or any future date at pre-determined prices.

There are two basic processes involved in the online commodity trading process that includes the following.

Order processing: It involves placement of an order with the aid of your broker that will initiate the trade. The dealer will fix a price and requests you to deposit its initial margin, depending on the commodity and the type of exchange. Once you do that, you will finally own the contract at the end of a trading day.

Mark to market (MTM) settlement: The clearinghouse or the trading exchange concludes a settlement price for every commodity on every trading day. Now, if the price has increased for a long position or decreased for a short position, the difference will be credited to your account. In the case, if the reverse thing happens, then the difference will be debited from your account.

Even, one can also do commodity trading through futures contracts. In this case, the buyers make money if the price increases. While purchasing futures, you no need to pay the whole money, just a fixed percentage of the actual cost, known as the margin. However, if the margin is low, then, you can purchase futures in the form of a huge quantity of gold by paying only a little amount of its price. Finally, it is also recommended to do commodity trading together with the stock trading as the commodity prices shifts in the opposite direction of stocks.

Which is the best broker for commodity trading in India?

Before discussing the best commodity broker for you, first, you need to understand the term commodity trading, which is quite different from trading with currencies and thus involve lower volatility in commodity pricing compared to bonds or equity by providing a proficient option in portfolio modification.

Once you have started online commodities market trading, first you need to open a trading account and then your foremost concern should be choosing the best broker for commodity trading in India. Although it is not a very difficult task but before choosing just find out that whether the broker service you have selected is perfectly fitting in all your trading requirements.

Criteria of best commodity brokers â–Ş With commodity segment, the best broker should offer regular recommendation and insights to its clients based on his portfolio. Even, for beginners, that broker should support his clients in all types of hand-holding like SMS, e-mail, phone calls, etc.

▪ The best full-service commodity brokers also remain connected to its client’s offline by providing the market trends or current research reports on various commodities on a regular interval.

▪ Moreover, any leading commodity broker offers it client traders the option of the easy-to-use platform together with brilliant risk management tools.

▪ Even, some of the best commodity brokers can also be accessed to 24/7 via live-chat or e-mail support in multiple languages.

Features that traders prefer while choosing the best broker for commodity trading This is really tough to opt for the best commodity broker that best suit for any trader. As some traders prefer the ease of use and simplicity, whereas for others, low fees as well as or the capability to serve with the lot more leverage. Even, there are a few traders who want brokers with the best skill to trade the huge number of products, can generate advanced charts, and thus can also handle lots of reliable customer service at any time in a day.

Some instances of the best broker for commodity trading in India include Sharekhan, Aditya Birla Money, etc.

Which is the best stock broker for intraday trading?

Before jumping directly into the question of finding the best stock broker for intraday trading in India, just have a look at the concept of intraday trading together with its different aspects. This is actually very important for the beginners. Therefore, intraday trading is actually the way of trading where you can purchase or sell your stock within the same trading day. Moreover, your stock broker will help you with the option of altering your order types before the market closes. Intraday trading, which is a high-volume game also serves as a high-performance trading platform by offering descent exposure, prompt customer service, and lower brokerage. Now, you can move forward to look for the features before choosing the best stock broker for your intraday trading option in India.

Features to look for while choosing the best stock broker for intraday trading in India To choose which stock broker suits perfect for your needs, you should remember the following points like an average number of trades per day, trading cost per trade, type of trading plans, your requirement on intraday trading, the reliability of trading platform, and much more. â–Ş Provides high-quality regulations and research regularly via WhatsApp, SMS, e-mail, or phone call

▪ 10 times exposure towards intraday equity trading ▪ Descent and well-designed trading platforms across several devices, such as trade station, mobile apps with algorithmic trading, etc.

▪ Offer intraday trading tips daily ▪ Differentiated range of trading products ▪ Offline presence widely through franchises in India or more than hundreds of subbrokers ▪ Online customer education ▪ Free maintenance charges ▪ Funds transfer process is very simple and easy Although different fancy advertisements about various stock brokers for intraday trading in India are easily available over the internet or TV channels, you need select the best one after considering the aforementioned features. Some of the well-known stock brokers for intraday trading include Angel Broking, Reliance Securities, Zerodha, ICICI Direct, etc.