Tips to Exploit Beginner’s Luck in Commodity Trading


Financial markets have existed since the birth of industrial revolution. As several industries emerged, many trades were carried among different industries. Industries required capital to grow, and different kinds of financial instruments were created to finance them. At the same time, they also required natural resources to sustain their production line.

The trade of natural resources gave rise to the creation of commodity markets. Since their inception, these markets have allowed individuals to buy and sell resources. In India, commodity market was not exchange regulated until the formation of MCX. With MCX, all the transactions have been market regulated.

With MCX being the market regulator, the liberty of trading all kinds of good has been suspended. Few metals and agricultural products are now available for trade, and all deals are required to revolve around them only. Over-the-Counter deals do exist, still their reliability and security is a subject of controversy. So, beginners, who are completely naïve about this arena of trading, can venture into the market by opening an online commodity trading account with companies like Religare Online.

commodities-trading

Capital markets and commodity markets are similar with respect to instruments traded. You can start simple by buying or selling units of metals or agricultural products. Gold and silver are traded heavily in the market, and you can exploit their price movements to fetch lucrative returns. But, if you want to venture into the derivatives segment, then commodity calls and puts are always there at your disposal.

All the natural resources, like gold, silver, crude oil, rubber, etc, are classified as arduous goods. Their prices are affected by international market movements whereas agricultural merchandize like corn, wheat, coffee, sugar, etc., are soft goods. Beginners can always refer to news and trade in soft goods. The initial returns may be low, but the assurance of recovering your initial capital is high.

If you are a beginner who wants to harness the movements of commodity markets, then do some substantial amount of studies and market research, before you punch your first deal.

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