What is the definition of trading a commodity?
A commodity is a physical substance such as corn or oil. The commodity market is very mercurial and fluctuates each day. Nonetheless, if you are willing to take the risks of commodity trading, you may be able to make substantive profits.HistoryCommodity trading began as a way for farmers to protect themselves against falling wheat and corn prices. Farmers entered into financial agreements that protected their crop values so they could sell their crop for a fixed price, even if the value of the crop decreased during the harvest season.Information ResourcesThe Commodity Research Bureau publishes information on commodity trading that is freely available to the public.Seasonal ImplicationsIt is important to consider the harvest cycle of corn or wheat before investing in commodity trades. Commodity traders analyze many factors such as the weather before making buy or sell decisions.SpeculationThe commodity market is driven by speculation. This means that prices can dramatically change due t
Commodity trading refers to the buying and selling of certain primary products through an authorized exchange. In India, commodity trading is possible in precious and non-precious metals like gold, silver, steel, copper, etc; crude; agricultural produce and many other raw or primary products. Three multi-commodity exchanges have been set up in the country to facilitate commodity trading. These days, many brokerage firms offer online commodity trading services. You need to open a trading account with a brokerage firm that is authorized to trade in commodities such as GEPL. The minimum amount needed to start trading in commodities is Rs 5,000.
