Commodity trading on MCX involves buying and selling standardized contracts for various commodities. Traders can take positions in these contracts based on their price expectations. The trading is done through electronic platforms provided by brokers, where traders can place orders and execute trades.
Commodity futures contracts are agreements to buy or sell a specific quantity of a commodity at a predetermined price on a future date. MCX offers futures contracts with different expiry dates for various commodities. These contracts help traders to hedge against price volatility or speculate on price movements.
Margin money is the initial deposit or collateral required by the broker to initiate a trade. It is a percentage of the total value of the commodity contract. The margin acts as a security deposit and ensures that traders have enough funds to cover potential losses.
MCX primarily caters to short-term trading and hedging needs. However, some commodities like gold and silver can be held for longer periods. If you are looking for long-term investments, other financial instruments like stocks, mutual funds, or commodities in physical form may be more suitable.
To start trading commodities on MCX, you need to follow these steps:
  • Open a trading account with a registered MCX broker.
  • Complete the necessary documentation and verification processes.
  • Deposit the required margin money with your broker.
  • Get access to the trading platform provided by your broker.
  • Place buy/sell orders for the desired commodities and manage your trades.
MCX offers a wide range of commodities for trading, including gold, silver, crude oil, natural gas, copper, zinc, lead, aluminum, nickel, agricultural products like wheat, cotton, and many more.