Commodity trading in India started for retail customer a couple of year ago when ICICI direct started providing commodity trading. Now they have discontinued commodity trading but they brought it in front of large number of retail customer for the first time.
Initially people started trading in precious metal and eventually graduated to trade in other commodity like agri and oil. And with the opening of three commodity exchange in India and given it a fillip.
And if you think about it, commodities actually offer immense potential to become a separate asset class for market-savvy investors, arbitrageurs and speculators. And compared to other trading class, commodities are easy to understand as far as fundamentals of demand and supply are concerned. Retail investors should understand the risks and advantages of trading in commodities futures before taking a leap. Historically, pricing in commodities futures has been less volatile compared with equity and bonds, thus providing an efficient portfolio diversification option. [Read more…] about Commodity trading basics