What is a trading account in the commodity market?
Just as it is necessary to open a demat account to buy or sell shares in the stock market, in the same way trading account is required for trading in commodity futures market. Without this you cannot do any kind of transaction in the commodity market.
To open a trading account in the commodity market, you have to have PAN card, address proof and bank account. When you open a trading account with a broker, then this broker will provide you with the ID of an account.
You can also trade yourself through this ID. For this, it is necessary to have internet facility in your mobile, PC, tablet. Through this account, the broker has to pay a fixed fee. If you do not want to deal with yourself, you can buy or sell the deal through phone to your broker.
Before trading in commodity trading itself, the risk is reduced by trading through a broker. If you want to do the deal yourself, then you can do mock trading for the first few days. MCX is mostly traded on non-agri and NCDEX in agri commodities. Before investing in the commodity market, it is also important to know which exchanges are traded.
For example, bullion, crude, base metals are traded on the country’s largest non-agricultural commodity exchange. Apart from this, some agri commodities such as mentha oil, crude palm oil (CPO) are traded. Similarly, most of the agri commodities futures are traded on the commodity exchange NCDEX. Other commodities, including guar, gram, barley, wheat, soyabean, coriander, castor, cumin, turmeric, are traded on NCDEX.