Commodity Tips : Trading Steps Of Commodity Futures & Stocks Fundamental

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END OF THE DAY REPORT (19 JUNE 2015):

Markets continue to rally; Nifty closed above 8200 mark.

Benchmark Indices gains for the 6th consecutive day with Nifty finally settled above 8200 mark/level led by index heavy weights and banks moved the market on higher side. Nifty gains 50 points to ends at 8224 while on the other hand BSE gains 200 points to settle at 27316.

HEADLINES FOR THE DAY:

  • Amtek Auto rose after the company clarified on FCCB issue.
  • Tractor stocks like Escorts M&M were in demand today.
  • APL LTD zoomed and hits fresh high on NSE on the back of huge volumes.
  • Infinite locked with upper circuit today on the share buyback plan.
  • Natco Pharma gains as US court invalidates Teva’s Copaxone patent.
  • Shares of Bharti Airtel gain as launched 4G trials in Delhi.

KEY STOCKS FOR THE DAY:

  • Shares of Tata Steel moved higher after the company said it is planning to set up new unit in SEZ (Special Economic Zone in Odisha).
  • DB Realty rallied as much as companies signed JV (Joint Venture) to develop residential project, namely DB Skypark in Mumbai with ECC and Konark.
  • Shares of Hindalco gains on the media report that LIC (Life Insurance Corporation) hike its stake in the company.
  • Shares of L&T ended with marginal gains on the reports that company bagged new orders worth Rs 2278 crore.
  • Sun TV zooms in today’s trading session after SC gives nod of security clearance to Sun TV Network.
  • Index heavy weight RIL (reliance Industry Ltd) gains for the 6th straight day.
  • Financial Tech gains on the positive news flow that the company entered into the SPA (Share Purchase Agreement) with DCB Power Ventures, Kiran Vyapar, Agri Power and Aditya Birla Capital on stake sale in Indian Energy Exchange (IEX).
  • Dish TV dips as much as in an otherwise market with a bulk deal.
  • Shares of Tata Elxsi, Tata Sponge rallied on the back of huge trading volumes today on NSE (National Stock exchange).

MARKET WEEKLY OVERVIEW:

Markets gained on all 5 days of the week (Monday-Friday) as Nifty had shows pulled back from its important support level support (given false breakout in 7960 as per Spot daily charts). In the coming week market will be volatile ahead of F&O expiry and all eyes would be on Greece’s ‘bundled’ payment held on June 30.

GLOBAL MARKET:

  • European shares opened lower, led by concerns over the lack of progress in Greek debt negotiations weighed on EQ (equity) markets.
  • China shares falls as sharp selling seen in Software & Computer Services, Technology and Banking sectors stocks.

If you want to invest in the Commodity Futures, there are a few basics, that you should know wrapping exchanges, in selecting a broker etc.

Commodity Exchanges: If you wish for to trade in the commodity futures, you can depart through any of the 3 exchanges – MCX, NCDEX & NYME. All 3 exchanges give electronic trading & settlement facility and Provide Profitable Commodity Tips.

Choosing a Broker: Next footstep is to select a broker. There are lots of brokers who are registered or authorized by the on top of mentioned exchanges. The brokers like ISJ Com-desk (subsidiary of ISJ Securities), SSKI (subsidiary of Share khan) offer commodity future trading services. Most of them also give online commodity trading facility.

Registration Formalities: You will have to separate ‘Commodity Demat Account’ with the National Securities Depository Ltd (NSDL) to buy and sell on NCDEX. You will also have to supply other essential formalities like PAN card details, KYC compliance, bank account details, etc.

Minimum Investment: You require to deposit a definite percentage of the whole contract value with the commodity exchange during a broker as a security money deposit. This sum is recognized as ‘margin’. The margin money can depend on the worth of the commodity agreement and they range from 5 to 10 percent of the assessment. Minimum monetary investment can be as low as Rs 5,000.

Brokerage & Transaction Charges: The brokerage fees depend on trading sizes and can range from 0.10% to 0.25%of agreement value. The brokerage might differ for dissimilar commodities, it will also differ from ICICI trade to ISJ Comdex. Deal charges range flanked by Rs 4 to 10 per lakh for every contract.

Settlement: You can option for both the amenities – delivery & cash. If you wish for your agreement to be established with cash, you have to point to at the time of putting the order. And, if you wish for to take the liberation, you require to have the required storehouse receipts.

You can alter the option of delivery or cash as sometimes you wish for till the agreement expires. You can at the present start investing with good Commodity MCX Tips. Start with a solitary commodity like Gold or copper, Silver and then shift on towards other as more understanding of the commodity market developments.

Advantages of Commodity Trading:-

Commission – Dealing of future contracts or agreements is very cheaper than annoying to buy or sell the real instrument. For example, a full volume S&P 500 agreement is worth around 250,000 dollars and can be traded for as little as 20 dollars. The real expense of trading 125,000 dollars worth of benefit can amount to maximum than $2500+.

You can go short – A entrepreneur can earn from bullish and bearish markets.

Liquidity Existence of speculators in the commodity Futures market, Futures agreements are virtually liquid. Even so, the liquidity fully depends very much on the real Futures agreement being bought & sold. Agreement like the E-Minis, which are bought & sold electronically are the mainly liquid. Agri Commodities like soya, corn, etc. which are bought & sold at the lowest point are not obtainable outright to the retail market trader and are also more expensive to handle in with regards to charge and spread.

No Cutoffs – Options are then subjected to time decompose because as they creep closer to expiration, there is very less time, there for the choice to be realized financially. Whereas with the commodity Futures, they don’t suffer from time decompose as they aren’t expecting a particular hit price at expiry.

Leverage – Commodity future works on margin base, which involve that to get a position only a small portion of the total value of the Futures contract is required to be paid in cash into the dealing account.

Disadvantages of Commodity Trading:-

  • Speed of Trading – Commodities utilized to be bought & sold in the pits. Thus, in arranging for any order to complete, a trader or speculator requires to agreement his broker, who in revolve will broadcast this order to the Ditch trader. Upon performing the deal, the pit investors with inform the commodity broker of the buy and sell who will pass the corroboration to the customer. Due to the time insulate, the opportunities of slippage happening are high.Nowadays, online commodity Futures buying & selling helps to reduce the time lag amid the customer and the commodity exchange by providing a straight link and Commodity NCDEX Tips.
  • Leverage – Low edge prerequisites can give confidence, poor money managing, which can in revolve lead to needless risk taking. Thus, in this casing, not only are the possible, multiplied, the possible for losses is also enlarged many folds!
  • Risk of Physical Delivery – There is a genuine risk of having to dig up physical delivery of the commodities. Visualize waking up a single day to find a motor vehicle of soybean or Oil waiting on your access way! However, in nearly all cases, actual physical liberation is not acted ahead Most Futures agreements are just managed through cash just the once tenure of the Commodity Futures contract has outdated.
  • Risky Business! – Trading in commodity products has been observed as something just for the specialist. Many investors have lost cash and the buy and sell is regarded as a very risky venture.

As mentioned previous, commodities dealing is as risky as the persons wish for it to be. How watchful or careless a investor is fully depends on him. A single can deal with commodity products cautiously and peril only a couple of 100 dollars per deal. The main trouble is that most of the people are irritated. They pursue the saying “the top way to create a small fortune dealing commodities. . . Start with a big one.” By captivating reckless risks, they merely ended up hurting themselves monetarily. Another motive why these singles lose their cash is that they revolve over manage of their cash blindly to others populace like brokers, advisers or fund managers.

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