In this post, we will cover up basic things like margin and charges applicable while trading in commodities.
As a trader, one should definitely look out commodity trading as
- Commodities market opens up for a larger time period and most active during evening timings as of IST. Usually (9am to 11.30pm)
- Technical patterns work like a charm.
- Commodities can’t be manipulated like stocks and they are directly linked with global markets.
There are a lot of commodities that are available for trading on MCX (exchange) but only a few are actively traded with good volumes.
Some of the commodities are traded in different variants (Gold, GoldM, GoldPetal) also. And depending on available margin and risk capacity a trader can trade accordingly.
List of actively traded Commodities
Most of the brokers offer trading with commodities. I generally prefer Upstox for commodity trading due to low brokerage and good margin.
As discussed already, that some commodities trade in different varients, therefore, 1 point movement (profit & loss) is not always equal to 1 rs.
For example, Crude oil is traded in 100BBL and 1 point movement in price is equal to 100 Rs profit or loss.
Below table lists most of the commodities traded on MCX exchange
While trading in commodities, you need to make sure about 3 important things
- Always check the expiry of the commodity contract. This expiry is different from NSE (equities). Some commodities contracts expire on the last Friday of the month.
- Avoid trading on the last day of the expiry of the contract has a physical settlement.
- Never leave the position open during high volatile days and on expiry.
Margin Requirements
Zerodha offers the following margin on silver. Silver is traded in 3 different variants ( Silver, SilverM, SilverMic). All variants have different margin requirements.
Margin Requirement for SilverMic on Zerodha
Read Full details on margin here.
Margin Requirement for SilverMic on Upstox
Read full details on margin here
Charges applicable on commodity trading
Charges applicable on Upstox
Upstox charges less brokerage compared to other discount platforms. Below are the charges applicable for trading in SilverMic contract (Upstox).
Calculate charges using Upstox brokerage calculator
Charges applicable on Zerodha
Calculate charges using Zerodha Brokerage calculator.
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