Important things you should know about commodity trading

Commodities market has been attracting the investors since many years. It is one of the famous and old market. However, no doubt many traders hesitate to do commodities trading because of its highly volatile nature and risk. Prices of assets are affected by various factors like global factor, political, local events and much more, even climate changes also affect the market situations and price of assets.

What is commodity trading

Commodity trading includes trading in commodities like gold, silver, agri products or any other primary product. Trading in primary materials that are used to create products is called commodity trading. In commodity trading, investors do trading in the primary product rather than trading in the manufactured or finished product. This does not mean a trader is taking delivery of commodities, the trade is generally done in an exchange called MCX or NCDEX just like the equity market. Traders can refer best commodity tips and gold and silver tips to market experts for a positive return. So basically commodity trading is a form of trading where the trader buys a commodity to gain profit according to the price of particular assets.

Categories of commodity

There are four classes in which commodities can be categorised like metals, energy, livestock and agricultural. Precious metals like gold and silver and raw materials like iron and copper come in the Metal while Oil products, natural gas and gasoline fall under energy. Food grains like rice, wheat and raw materials like sugar and cotton fall under agricultural commodities. Many traders show their interest in commodity trading because of its many benefits and high liquidity. Crude oil, gold and coffee are some of the most traded commodities in the market. A sebi registered investment advisor or financial experts provide guidance to the trader in which commodity should be best to invest.

Benefits of commodity market

1. In commodity trading, traders need to deposit a margin amount with your broker which can be near 5 to 10% of the of contract value, which is lower than considering another asset. In such a low initial margin allows you to take larger positions at a small capital.
2. Commodities are no doubts very riskier form of investments with huge ups and downs in prices. Companies either hit it right or experience heavy losses. Commodity market provides opportunities for traders to make huge profits because it provides you right investment plan.
3. Many investors often feel insecure about investing in commodities but precious metals like silver, gold, and platinum provide a clear protection during inflation and economic uncertainty. Commodities are very good source of investment during hard times.

"Investing in commodity market can be the best platform for an investor but basic learnings, rules and regulations of the market is essetional to gain profit in the market"

For more information please visit our website : http://www.epicresearch.co/commodity-tips/mcx/precious-metal/

I am priya rajput, working as Digital marketing analyst in Epic Research Limited-the leading advisory firm in India. I regularly writes about commodity market to give gold and silver tips