As the name itself says, commodity trading involves investing or trading in commodity. It is quite similar to share trading, where one buys and sells the shares of companies. But the key difference here is, a trader only deals in buying and selling of commodities. The traded commodities are generally goods in value, consistent in quality and produced in bulk by different suppliers, including wheat, sugar and coffee. Such type of trading is affected by demand and supply, limited supply can result in price inflation, while excessive supply causes fall in the prices.
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Commodity trading is an investing strategy wherein goods are traded instead of stocks. Traders can trade various commodities and products at a trading exchange platform. In India, there are three national level commodity exchanges in which investors are free to trade all permitted commodities.
Online Commodity Trading
Over the years, online trading commodity has gained immense popularity among investors. This trading platform offers easy and convenient trading experience, unlike yester years where you had to contact the broker and give him instructions. Trading commodities online skips the role of broker in between by allowing instant trading. Almost everything can be traded through an online commodity trading account, including commodity news, commodity trading charts and technical analysis programs.
The execution of online trading is much quicker. The trader is the sole controller of the trade and is responsible for end trading decisions. This gives him a sense of independence.
Advantages of Online Commodity Trading
- Once you log in to your trading account, you will get access to plenty of resources, including charts, futures news, live quotes, research and even online assistance. This way, this online trading platform offers an easy and convenient trading experience.
- Online commodity trading is flexible in nature. You can trade from anywhere and at any time as per your convenience. This means you can keep a close watch on the market and can make quick trades, if needed.
- Commodity trading offers the benefit of leverage which means you can use borrowed capital to upsurge the potential return on investment. Besides, you are required to pay only a small percentage of the total value of a position in order to increase profits and get full benefit.
Most of trading company offers customized investment solutions to retail investors, corporates and institutions.