What is the Timing of the Commodity Market in India?

The following article discusses the history of the Indian commodity market. It also informs you about a range of trustworthy brokers and commodities exchanges operating in India. In this post, we’ll break down some of the most technical words used in the Indian commodity market so that even a beginner may understand them.

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Origin of Commodity Trader

Organized commodity commerce in India began in 1875 with the establishment of the Bombay Cotton Trade Association. However, the foundation of the commodities market was laid down much earlier than in any other country.

Futures markets in jute and other jute products emerged shortly after the Bombay Cotton Exchange was established in 1893.

Let’s investigate the nature of commodity trading and why it’s garnering so much attention now.

What is commodity trading?

Stocks aren’t the only things that investors and traders buy and sell to earn a profit. Profits from the commodity market might be quite attractive if one knows what they’re doing. Commodities are widely traded all over the globe. They are the backbone of any economy.

The word “commodity trading” refers to the buying and selling of various raw materials and finished products made from them. Let’s break down each portion of this explanation so you can fully understand it.

It all starts with a massive commodity trade. There is a limit on how many units may be acquired at once when buying units. The interaction of supply and demand establishes the market price of an item.

What Time Does the Commodity Market Open?

The commodity market opens for trading at 9.00 a.m. every day. You can start trading all commodities at 9 a.m.

Commodity Market Closing

The closing commodity market times for diverse commodities are not uniform in the Indian commodity market.

• At 11:30 pm EST, the closing bell rings for all commodity trades other than those involving food and agricultural products.
• The last trading hour for cotton, among other agricultural products, is 9:00 pm.
• Likewise, the market for all other commodities closes at 5:00 pm.
• All today commodity market positions must be squared off 25 minutes before the market’s closure, and trade adjustments are accepted till 11:45 pm.
• Traditional banks such as ICIC Direct and HDFC Securities provide commodity trading services.

What Kind of Deals Can You Make in the Commodity Market?

The commodities traded on the Indian commodity market fall into two broad categories: agricultural and non-agricultural. Non-agricultural commodities may be further broken down into three groups: precious metals (gold and silver), energy (fuels and ores), and industrial metals (base metals). Among the most frequently bought and sold commodities on the markets are:

• Black pepper, cardamom, castor seed, cotton, palm oil, kapas, wheat, rice, chana, bajra, barley, and sugar are a few of the many items that come from agriculture.
• Meant for storage or Exchange, bullion typically consists of silver and gold.
• Fuels consist of crude oil and natural gas.
• Base metals are nickel, zinc, lead, copper, lead, and aluminium.
• Cotton, copper, silver, and gold are India’s most widely traded commodities.

Commodity Exchanges: Several Unique Markets

Commodity markets may be divided into two categories:

• Spot markets are also called physical markets or cash markets. Here immediate delivery of items is traded.
• The derivatives market includes both futures and forwards. Users may schedule an exchange on a certain day and price. Deliveries of the exchanged product take place at the expiration of the contract.

MCX, NCDEX, and other exchanges in India are used for trading commodities. Two of India’s most popular exchanges for trading commodities are the Multi Commodity Exchange (MCX) and the National Commodity and Derivatives Exchange (NCDEX).

In 2003, the Multi Commodity Exchange (MCX) was established as a marketplace for exchanging non-food commodities.

Agricultural products are the primary items traded on the National Commodity and Derivatives Exchange. It has been operational since 2003.

Commodities Market Participants are essential to ensuring the fairness of these markets. The vast majority of participants in commodity markets are either hedgers or speculators.

Speculators are those who aren’t involved in the production or consumption of products. They enter the market for short periods to profit from price fluctuations. 

Those who have a stake in the commodity they trade are called “hedgers.” As a result of their dealings, commodity price fluctuations are eliminated.

These players contribute to the market’s stability and collaborate to set its direction.

How to Make Money Trading Commodities

Traders in commodities need a Demat account in the same way that stock traders do. Choosing a broker to open a Demat account with isn’t difficult. Many viable options exist. However, before opening an account, ensure your prospective broker has a solid track record, competitive rates, and low costs. Finding a broker that can provide you with higher margins requires careful consideration.

Commodity exchanges conducted through the internet

Buying and selling commodities online are similar to trading stocks or other assets. Indian commodity markets may be quite lucrative. Shares can be traded just as easily on the BSE as on the NSE, and vice versa.

MCX (Multi Commodity Exchange of India Limited) and NCDEX are the two most well-known exchanges (National Commodity and Derivatives Exchange Limited) for those interested in trading commodities in India.

The commodity trading market functions differently from the stock exchange. Commodity trading margin requirements are not fixed like stock trading margin requirements are.

Why Do People Engage in Commodity Trade?

• First, purchasing commodities like gold and silver is the best way to diversify your financial portfolio.
• Second, the returns from commodities are diversified and risk-adjusted. In contrast to equity commodities, stock market declines lead to price rises.
• Commodity prices are relatively immune to inflation since they tend to rise when money loses purchasing power.

Investment in Basic Materials is Now Appropriate

The Indian commodity market is active throughout the year and features trading in various goods. The Commodity Exchange is open during regular business hours, Monday through Friday. Any holidays declared by the Exchange are communicated in advance to the traders.

Conclusion 

Primal Financing House provides its consumers with cutting-edge stock trading solutions to make stock trading a breeze. If you are a beginner with a high level of intuition, employing Pirimial Financing House will simplify your investment and trading on the commodities market. You can get their help for the best experience.