What is a Commodity?
A commodity is a valuable thing that can be bought or sold, in short, traded. Sometimes commodities are referred to as economic goods that are used as input to other finished goods, which are traded for other commodities in exchange. Commodities can be generally classified into hard commodities and soft commodities. Hard commodities constitute MCX Gold, MCX crude oil, rubber etc that can be extracted, whereas soft commodities are those that are season depended like the agricultural based products like wheat, coffee, corn, tea, sugar etc.
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The Commodity market
Trading of primary goods (which are better known as commodities) take place in the commodities market, which is further manufactured to become finished products. When commodities are traded in the market, it is referred to as the commodity market.
The commodities market is the place for trading in various commodities. The trading can be either in the spot market or the derivatives market. The derivatives market includes various financial instruments that are traded for long-term, whereas in the spot market, commodities are bought and sold for spot (immediate) delivery.
Commodity trading
Commodity Trading is similar to stock trading where commodities like metals are traded instead of other financial instruments like stocks. Commodities are traded in the commodity market where the investors' trade commodity products in return for profits based on the price fluctuations of that particular commodity. Similar to the stock market, commodities are traded at the right time based on the increase or decrease in prices. ATS provides you the best commodity tips, MCX Crude Oil Tips and free MCX tips. Subscribe to get free MCX tips for 5 days.
- Methods in which commodities are traded:
- Futures – In this method, futures act as a contract that directs the price of the commodity at a certain price.
- Options – In this method commodities are traded at a particular date and price
What are the types of commodities being traded?
Currently, the commodities that are traded fall under the below four categories:
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Multi Commodity Exchange of India Limited
The Multi commodity exchange of India Limited (MCX) is the commodities derivatives exchange in India. MCX started its operations in November 2003 and became to be India's first listed exchange. The multi commodities exchange operates under regulatory framework of the securities exchange board of India.
MCX facilitates online commodities trading, clearing, and settlement of commodity trading transactions. It offers an excellent trading platform and risk management for trading in commodities like industrial metals, energy products, and agro-based commodities. MCX has its presence in more 1200 cities across India, with a market share of 89.93% in terms of a value of the contracts traded in commodities futures.
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Trading and Investment in Stock/Commodity/Currency markets have inherent risk, you might lose all your investment and we do not promise any return.