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Commodity Trading

Basics

by

Trade Smart Online

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A physical or virtual marketplace for buying, selling

and trading raw or primary products.

Major Commodities

Market worldwide

Primary

Commodities

Traded

Two types:

HardSoft

Gold, Rubber, Oil,

Gas

Agricultural

Products & Livestock

Commodity Marketplace

50

100

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Why Commodity Trading?

Lets say you want to buy gold because you

believe that the price of gold will rise.

What will you do?

You will probably buy gold bars, store them, wait for

the price to go up and then sell them.

Problems: You have to be sure whether the Gold is

pure or not, you will need a safe place to store it thus

require security and other hassles.

Solution: Just buy Gold Futures from the Commodities

Exchange.

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1 gm of Gold

Futures Contract

Worth: INR 3000

You don't have to pay the entire

amount, just a fixed

percentage of the cost. This is

known as the margin.

How it Works?

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How it Works? 1 gm of Gold

Futures Contract

Worth: INR 3000The margin for gold set by the Exchange is

5%. So you only end up paying Rs 150. The

low margin means that you can buy futures

representing a large amount

of gold by paying only a fraction of the

price.

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How it Works? 1 gm of Gold

Futures Contract

Worth: INR 3000

The next day, the price of gold rose to Rs

3050 per 1 gm.

Rs.50 will be credited to your account.

If the following day, the price dips to Rs

2950.

Rs.50 will get debited from your account.

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Things to Remember!

Stock Vs Commodities

--As margins are much lower than in stock

futures.

Even Brokerage charged for Commodities is low. Well here at Trade Smart Online we offer

Zero Brokerage Trading!Thus, Commodities Futures are Investors Paradise.

No need to study complicated Financial

statements----all you have to do is follow the

Supply and Demand position of the

commodities you trade in very closely!

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Products Listed

Bullion (Gold, Silver & platinum)

Energy (Crude oil, Natural gas, et al)

Base Metal (Aluminum, Copper, Zinc,

Lead, et al)

Agro Product (Turmeric, Pepper,

Cardamom, et al)

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Market Timings

10 A.M to 5 P.M - (Agro Commodities)

10 A.M to 11.30 P.M - (International

Commodities)

The market is Driven by Demand and

Supply

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How to find Demand & Supply?

Supply

&

Demand

Technical

AnalysisSymptoms

Human

PsychologyFundamentals

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How to find Demand & Supply?

The study of supply and

demand is also known

as “Fundamental

Analysis".

Fundamental information;

Political events;

Natural disasters and

Psychological factors

will quickly show up in some

form of price movement.

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Ex. Due to the current Iraq crisis, Crude

Oil Prices has risen

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How to do Online Trading?

25%

25%25%

25%

Investments

Fundamentals

Technical Analysis

Market Knowledge

You need to Balance:

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Where to Begin?

Trading is vast. But do not get Confused.

Trade Smart Online is always there to help you.

Visit: http://tradesmartonline.in/ or

Call: 022 42878000

for a Zero Brokerage and smooth Trading experience online!

Like us and Share this content in

https://facebook.com/tradesmartonline

Follow us on:

https://twitter.com/tradesmartonlin

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Conclusion

“Having trading discipline is the

beginning; keeping discipline is the

progress; staying discipline is the

success”.

--- #TradeSmart

Thanking You!

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Reference

Beginners Guide- Commodity Trading

Terms- Investopedia

Articles- Investopedia

http://bit.ly/1qvJTa3

http://bit.ly/1ivAQ98

http://bit.ly/1pNeyjQ Zero

Brokerage!