Commodity futures markets allow commercial producers and commercial consumers to offset the risk of adverse future price movements in the commodities that they are selling or buying.
A commodity broker is a firm or individual who executes orders to buy or sell commodity contracts on behalf of clients and charges them a commission. A firm or individual who trades for his own account is called a trader. Commodity contracts include futures, options, and similar financial derivatives. Clients who trade commodity contracts are either hedger using the derivatives markets to manage risk, or speculators who are willing to assume that risk from hedgers in hopes of a profit.
When the global scenario of the stock markets are under a great turmoil , than it's the right time that our portfolios should be hedged with Commodities markets. With SRM you not only get the expertise advise but a Unique Trading Platform, which gives you a Great Trading experience in Commodities market. With a SRM Trading Account, you can trade in Commodity Futures from both MCX and NCDEX using a single screen.
WHY TRADE IN COMMODITIES?
Leverage. Commodity futures operate on margin, meaning that to take a position only a fraction of the total value needs to be available in cash in the trading account.
Commission Costs. It is a lot cheaper to buy/sell one futures contract than to buy/sell the underlying instrument. For example, one full size S&P500 contract is currently worth in excess off $250,000 and could be bought/sold for as little as $20. The expense of buying/selling $250,000 could be $2,500+.
Liquidity. The involvement of speculators means that futures contracts are reasonably liquid. However, how liquid depends on the actual contract being traded. Electronically traded contracts, such as the e-minis tend to be the most liquid whereas the pit traded commodities like corn, orange juice etc are not so readily available to the retail trader and are more expensive to trade in terms of commission and spread.
Ability to go short. Futures contracts can be sold as easily as they are bought enabling a speculator to profit from falling markets as well as rising ones. There is no uptick rule for example like there is with stocks.
No Time Decay. Options suffer from time decay because the closer they come to expiry the less time there is for the option to come into the money. Commodity futures do not suffer from this as they are not anticipating a particular strike price at expiry.
No balance sheet, P&L statement, EBITDA and reading between the lines. Commodity trading is about the simple economics of supply and demand.
Supports are known, only resistance matters! Minimum support price acts as a statutory support for many commodities.
No Dollar-Rupee premiums/discounts. No hedging on the NYMEX. Indian commodity derivatives hedge both forex and commodity specific risk, at a single cost.
No brainstorming over market direction. Seasonality patterns quiet often provide a clue to both short- and long-term players.
No scam, no price rigging. Commodity trading comes with no insider trading information and company specific risk
The SRM Commodities Advantage
Live Market Watch for commodity market (NCDEX, MCX) in one screen.
Add any number of scrips in the Market Watch.
Tick by tick live updation of Intraday chart.
Greater exposure for trading on the margin available
Common window for market watch and order execution.
Key board driven short cuts for punching orders quickly.
Real time updation of exposure and portfolio.
Facility to customize any number of portfolios & watchlists.
Market depth, i.e. Best 5 bids and offers, updated live for all scripts.
Facility to cancel all pending orders with a single click.
Instant trade confirmations.
SRM Commodity Pvt. Ltd. is member of both the premier Commodity Exchanges of India viz.:
1. MULTI COMMODITY EXCHANGE OF INDIA LTD
2. NATIONAL COMMODITY & DERIVATIES EXCHANGE LTD