Commodity Trading Platform, How to trade Commodities, Create Forex commodity Account Here: Every second person wants to earn money for better living, some get an opportunity to make, and some don’t.
Investment is the safest option to double your capital and earn as much as you desire. Apart from this, there is also a situation where you have money but do not understand where to invest.
If you are not afraid to take the risk, you can earn more and more money in more limited capital by investing in the commodity market.
If you can perceive the risk, then the commodity market also has so much potential that you cannot get such a high return anywhere other than this market.
Commodity Trading Platform, Advantages of Commodity trading
However, the most significant risk of investment in the commodity market is the loss of original capital. Let’s understand how much profit you can make by investing in the commodity market and its risks.
Ajay Kedia, director of Kedia Commodity, stated that the most significant advantage of investing in the commodity market is that you can invest a lot in small capital.
If you have to invest in 1 kg of physical gold, you have to invest about Rs 34.21 lakh. Once you get involved in the commodity market, profit is assured.
Another way you can invest in gold is through future trade. Future trading means that you have to book your order by paying a fixed amount and the expiry period of your order will be a maximum of 1 month.
Expiry period means that within this period you can earn a profit on your investment anytime. To invest in gold at the current rate, you will have to pay a margin of 5 per cent of the entire order value, which will be around Rs 1.8 lakh.
This means that you ordered physical gold worth Rs 34.21 lakh for just Rs 1.8 lakh. The third way of investment in options. In options trade, you have to pay a premium amount, and the expiry of its order is for two months.
Assuming that the premium price (LTP) is Rs 500, then by investing one lot (its value is equal to one kg of gold) by investing in gold through options, you have to pay around 50 thousand rupees (500 * 100).
Comparative advantages of investing in the commodity market
In this way, you can see that the investment in gold through options will be just 50 thousand rupees as compared to the investment in real gold through Rs 34.21 lakh and future gold through Rs 1.8 lakh.
This is how to profit calculus occurs in future and options. It is effortless to calculate the advantages and disadvantages of investing in physical gold.
Suppose you have invested one kg of gold at the rate of 34 thousand per ten grams of gold, then you will lose about 2 lakh rupees if its price falls by 2 thousand per ten grams, while its price will be Rs 2 thousand per ten grams.
If you get faster, you will earn around 2 lakh rupees. Talking about the future, you have to pay margin money (5% of the entire order value) of about Rs 1.8 lakh to book an order.
If its price falls by 2 thousand rupees per 10 grams, you will lose 2 lakh rupees, but if there is an increase of 2 thousand rupees, you will profit from 2 lakhs.
Here, a piece of advice is given that if you are losing money in futures trading, you can make gold delivery by providing 100% margin money and exit when you profit.
You have to pay only the premium amount in options, and you will have to bear the maximum loss premium.
If you feel that the price of gold may increase, you buy call options, and if you think that the cost of gold may fall further, you buy put options.
In this, assume that you have booked the order by paying 50 thousand premium money based on 500 rupees LTP. If its LTP increases by Rs 200, then it is your profit. On the contrary, if its LTP falls by Rs 200, then it is your loss.
How to start commodity trading?
To start commodity trading, SEBI has to open a trading account with a registered broker. If you do not take delivery, then there is no need to open a Demat account, and even Sebi has not made it mandatory.
For opening a trading account for commodity trading, you can give your PAN card or Aadhaar as an identity and Aadhaar or bank passbook for address proof. Must provide the photo.
Apart from this, six months bank passbook statement will have to be given for income proof.
After opening the account, you are ready to do commodity trading and depending on the commodity in which you can profit in it and how much risk you can take, trade your future or options.
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