Commodities
Trading

buy/sell a commodity at a future date at fixed price & defined quantity.

largely categorized into bullions, metals, agriculture and energy.

diversify investments other than shares, currencies or land

Different Commodities Traded

Metals

Precious Metals - Gold & Silver Industrial Metals - Aluminum, Copper, Lead etc

Energy

Natural gas, Crude oil.

Agriculture

Cotton, Crude Palm Oil, Kapas, Mentha Oil etc.

What are Commodities?

Commodity is a product used or consumed in everyday life. A commodity is a physical good with a certain economic value. It can be easily purchased, sold, traded, used, produced and stored.

Commodity trading Advantages
and Disadvantages

Advantages

Inflation Hedge

Commodities are often seen as a hedge against inflation since their prices tend to rise when the cost of living increases.

Portfolio Diversification

Trading commodities provides an avenue to inventors to diversify their portfolio in different classes of asset other than stocks, mutual funds or bonds to spread the risk.

Liquidity

Future Contracts in highly traded commodities offer high liquidity along with returns.

Volatility Hedge

Producers and sellers of commodities hedge the risk of volatile price movements by buying and selling future contracts.

Disadvantages

Global Factors

Commodity prices are highly sensitive to geopolitical events and economic factors. A war or pandemic like situations cause high price fluctuations.

High Volatility

Commodities have a higher volatility compared to other assets like stocks and bonds, making it difficult to predict future movements.

Why open a Commodity trading
account with Rupeezy

Low Brokerage
Charges

Rs 20 per order for Commodity Futures.
Rs 20 for Commodity Options

Free & Quick Demat
account opening

Zero charges for demat account opening

Online Paperless
Account Opening Process

Same day account opening and
activation

One Account,
Multiple Products

One platform for stocks,
derivatives, IPOs

How to invest in
Commodities

Click here and fill in the required details for opening an online commodity trading account. Select Derivatives as a segment.

Upload your documents. Submit income proof additionally for derivatives segment.

After verification, your account is activated and you can login to start online commodities trading.

Documents required to
open account

To open an online commodity trading account, following documents are required

Type 1 : Proof Of Identity

PAN Card

Type 2 : Proof Of Address

Aadhar Card

Driving Licence

Any One

Type 3 : Proof Of Income

Bank Statement

ITR

Any One

Commodities exchanges
available in India

Commodity trading in India is carried out on commodity exchanges which are regulated, secure and recognised. Mainly, commodity trading is done through MCX and NCDEX in India. Online commodity trading in India has gained popularity due to easy access and user friendly apps.

Following are the national commodity exchanges in India:

MCX (Multi Commodity Exchanges of India Ltd)

NCDEX (National Commodity and Derivatives
Exchange)

ICEX (Indian Commodity Exchange)

Explore Other Platforms

Rupeezy App

Rupeezy trading app to place trades from anywhere with features such as Custom notifications, Reports and Analytics, MTF, Option Chain, Margin Estimates.

Frequently Asked Questions

Q1. Who determines commodity prices?

Ans. Similar to other securities like shares, commodity prices fluctuate depending on various factors: Demand supply equation: The commodity prices rise or fall depending on the demand and supply. Market conditions: Commodities are good used for specific purpose and the demand and price can vary due to external factors e.g. energy consumption may rise in winters or go down in specific regions due to local factors. Global factors: Geo political factors impact commodity prices e.g. during a war energy and metal prices go up or recession can lower demand for agri products or precious metals.

Q2. What are commodity derivatives?

Ans: Commodity Derivatives are securities contracts, futures and options with commodities as underlying security and traded on recognised commodity exchanges. Commodity Derivatives allow investors to earn profit from commodities without a physical purchase or trading.

Q3. What is the minimum amount required for commodity trading?

Ans: There is no minimum amount required to begin commodity trading. You can allocate an amount depending on your portfolio allocation and risk appetite. In certain commodities there could be a minimum quantity to be purchased, for those you may have to start with the minimum quantity or invest in commodities that do not have a minimum quantity specified

Q4. Is commodity trading better than stock trading?

Ans: Commodity trades deal in less number of products and securities as compared to stock trading. The commodity market works in business cycles but stocks have no such time frames. On the other hand, commodity prices are more volatile as compared to stocks. There are pros and cons to both the markets. As an investor you can diversify your portfolio with stocks as well as commodities.

Q5. What is the safest commodity to trade?

Ans: Crude oil, gold and metals are considered to be the safest commodities to trade. Crude oil is a commodity that is in demand globally due to its use in various forms e.g. fuel, industrial petroleum based products, chemicals, consumer products. Due to high demand and usage, crude oil is a highly traded commodity with liquidity and price movements. Gold is a universal commodity of value by central banks and governments for holding currency. Gold is equally in demand for personal investment, jewellery and for commercial purposes. This makes it an in-demand highly traded commodity and offers price variations for arbitrage. Base metals like aluminium, zinc, copper etc are abundant in supply and have a high demand due to uses in industries like electronics offering good liquidity and volume.

Q6. Should you invest in commodities?

Ans: Trading commodities is an avenue available to investors online, to add another asset class in their investment basket. Commodities can act as a hedge against volatility in other asset classes e.g. stocks. You can allocate a percentage of your portfolio depending on your financial goals and risk appetite.

Q7. What are the charges for commodity trading with Rupeezy?

Ans: Commodity Futures: Brokerage: Rs 20 per order STT/CTT: 0.01% on sell side (Non-Agri) Exchange transaction charge: 0.0026% GST: 18% on (brokerage + transaction charges + SEBI charges) Commodity Options: Brokerage: Rs 20 STT/CTT: 0.05% on sell side Exchange transaction charge: 0.05% GST: 18% on (brokerage + transaction charges + SEBI charges)

Rupeezy Mobile App

Access your free demat account

Sr. No	Name of Bank Account	Bank Account Number	IFSC Code
1	ASTHA CREDIT AND SECURITIES P LTD - USCNBA A/c	00620340000150	HDFC0000062
2	ASTHA CREDIT AND SECURITIES P LTD - USCNBA A/c	57500000351820	HDFC0000062

*Investors are requested to note that Stock broker Astha Credit and Securities Private Limited is permitted to receive/pay money from/to investor through designated bank accounts only named as client bank accounts. Stock broker Astha Credit and Securities Private Limited is also required to disclose these client bank accounts to Stock Exchange. Hence, you are requested to use following client bank accounts only for the purpose of dealings in your trading account with us. The details of these client bank accounts are also displayed by Stock Exchanges on their website under “Know/ Locate your Stock Broker.

Commodities Trading