Some Advantages & Disadvantages Of Commodity Trading With NSE, BSE Report

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Market wrap-up (02 July 2015):

Market ends on flat to negative note; Sensex ends below 28000.

After a steady day market ended the session lower tracking weakness in the European peers as the mood remained skittish after hopes of a last minute deal between Athens and the euro zone dampened. Sensex ends below 28000 dips 75 points to end at 27945 on the other hand Nifty ends below its crucial mark i.e. of 8450 at 8444.

HEADLINES FOR THE DAY:

  • Ramco Systems rallied assign pact with Australian firm.
  • BEML hits fresh high on NSE on the back of huge trading volumes.
  • OMCs gains on growth prospects; BPCL, IOC hits new high today.
  • Vakrangee rise on foreign institutional investors buying.
  • L&T Construction secured new orders of Rs 1885 crore in the June month.
  • Adani Ports gains 2 percent on block deal.

ALL ABOUT SALES NUMBER:

  • TVS Motor moved higher after the company reported 26 percent growth in total export for June month stood at 43025 units against 34103 units same month last year.
  • Bajaj Auto moved higher in a volatile market after the company reported 8 percent growth on a yearly basis. The Company sold 331317 units against 305465 units last year.
  • Ashok Leyland gains in an early trade as a companies June month sale up by 41 percent year-on-year. Ashok Leyland sold 10461 units in the last month against 7411 unit same month (June) last year.
  • Volkswagen sales for the June month rise 31 percent, according to reports, the company sold 4039 units in June 15 against 3079 units same month last year i.e. June 2014.

KEY STOCKS FOR THE DAY:

  • Shares of Inox wind moved higher after rating agency Motilal Oswal starts stock rating with BUY with target price 543..
  • NBCC reported that it bagged a new project from DDA (Delhi Development Authority) worth Rs 15 billion or development of Lake View Complex.
  • Shares of Arvind Limited moved higher after the company said it had entered into partnership with Aeropostale.
  • Hero Moto Corp ends on a flat to positive note after the company reported falt sales number for the month of June. Sales up by 0.14 percent compared to last year.
  • Bharti Airtel surged on the media reported that company has completed the sale of its tower assets in five countries.
  • Shares of DB realty moved higher on the reports that company arm plans to launch Mumbai housing project in October month.
  • Shares of Jain Irrigation and Shakti Pumps extend its previous day gains after the cabinet approved PMKSY (Pradhan Mantri Krishi Sinchai Yojna).
  • Sun Pharma shares rise after its arm names Taro gets nod for generic of Clarinex from USFDA.
  • ICICI Bank ends in a flat to positive note after bank appoints M K Sharma as non-executive part-time chairman.
  • SUN TV shares falls on the media reports that company moved to SC (Supreme Court) against attachment Of assets by Enforcement Directorate.
  • STAR gains after RBI (Reserve Bank of India) lifted the curb on fresh purchases by FII (foreign investors) at the counter.

Important Calls And Nifty Tips For Tomorrow:

  • BEML EQ gains and hits fresh high on NSE, More buying could be seen in the next trading session as today it ends with a Big bullish candle. Buy above 1319.90 targets 1333/1346.40/1359.90 SL 1306.50.
  • IBULHSGFIN EQ had given breakouts of all its important resistance and hits new high and given closing above its important resistance in daily & weekly charts. Buying opportunity could be from the current levels. Buy above 674.60 targets 681.30/688.20/695 maintain SL of 667.50.

GLOBAL MARKET:

  • On the global front, China shares will dip today fighting off fresh moves by regulators to restore confidence and raising questions about how much more firepower Beijing can bring to bear before a full-scale panic sets in.
  • Australia shares ends in a green territory led by Consumer Discretionary, Consumer Staples and IT sectors shares.

Advantages of commodity trading

The Commission: Trading of commodity future contracts or agreements is much cheaper than trying to buy & sell the real instrument. For example a full volume S&P 500 contract is valued around 250,000 and can be traded for as little as 20. The real expense of selling or buying 125,000 worth of the asset can total amount to more than 2500+.

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

Liquidity—Because of the entity of speculators in the commodity future market. Commodity futures contracts are experimental liquid. Nevertheless, the liquidity fully depends very much on the real commodity futures contracts being bought & sold. Contracts like the E-Minis, which are bought & sold electronically are the mainly liquid. Agriculture commodity products like soybean, corn, etc, which are bought & sold in the pits aren’t obtainable outright to the retail investors and also very costly to drive in with related to the commission and speared. Broker Can help you and provide Commodity NCDEX Tips for Agri market trading

No cutoffs – Options are subject to time decompose because as they creep closer to ending, there is very less time there for the commodity option to be understood monetarily. Whereas with Futures, they don’t suffer from time decompose as they aren’t expecting a exacting strike rate at expiry.

Leverage – Commodity future works on margin base, which intention that to get a position only a little portion of the whole value of the commodity futures contract is needed to be paid in money cash into the commodity trading account.

Disadvantages of commodity trading:-

Speed of trading – Commodity products used to be bought & sold in the pits. Thus, in order for several orders to complete, an investor or traders or speculator need to agreement his broker, who in twist will transmit this trade order to the pit investors. Upon performing the transaction, the pit dealer with inform the commodity broker of the buy and sell who will exceed the confirmation to the customer Due to the time warp, the opportunity of slippage occurring is so high.

Nowadays, online commodity Futures buying & selling helps to reduce the time lag flanked by the customer and the commodity exchange by giving a direct link. The commodity exchange can provide most profitable Commodity MCX Tips for risk free trading.

Leverage – Low margin base prerequisites can give confidence, poor capital management, which can in revolve lead to needless risk taking. Thus, in this case, not merely are the possible, multiplied, the possible for losses is also augmented many folds!

Risk of Physical Delivery – There is a real risk of having to get physical delivery of the commodity products. Imagine waking up single day to discover a truck of soybean or oil waiting on your entrance! However, in lots of cases, actual physical deliverance is not acted ahead. Most commodity futures contracts are now settled through cash money once the tenure of the commodity futures contract or agreement has expired.

Risky Business! – Commodity trading in commodities has been looked upon as something just for the specialist. Many commodity traders have lost his money and the deal is regarded as an enormously risky gamble. As mentioned previously, commodities dealing is as risky as the singles wants it to be. How careless or careful a trader is depending on him. A single can deal with commodity products cautiously &risk only a pair of hundred dollars per deal. The main difficulty is that nearly all people are annoyed. They chase the saying “the best technique to make a little fortune dealing commodities . . . Start with a big one.” By getting reckless risks, they simply ended up soreness themselves monetarily. Another cause why these singles lose their cash is that they revolve over manage of their cash blindly to others populace like brokers or money managers.

There are basically 4 fundamental tips that must be included in every trading strategy.

Trading with the Trend– A significant aspect of the dealing plan is assessing the main time frame for the implementing these choices. You require to determine, whether you must observe a bimonthly movement, half yearly movement or an hourly movement. You also require to decide, if you what to be a position investor or trader, a short term investor or a day trader.

Cutting Your Losses- If your right of way is following commodity market trend rather than predicting the commodity trend, then the after that step is choosing when to exit the deals which are functioning out. Losses are to be predictable in any deals. Because the marketplace is generally unsystematic, even the nearly all ideal trading technique will produce losses. Professional commodity market traders are smart to see pass all losses & come to terms through them and don’t regard them as being incorrect.

Letting Your Profit Run- Letting your income run means, that you must allow your gainful trades to scamper for as long as probable as the commodity market trend is expected to preserve itself and produce more profits .

A good Commodity Tips to allow your earnings to run, whereas still protecting manually from losses from a rate drop which consume away your earnings before a commodity trend reversal is to utilize a trailing end. What this fundamentally means is that you describe an exit point some single behind your buy & sell. Unless the commodity market refuses by the quantum of your trailing end, you will be clever to let you revenue run. Once the marketplace reversal has attained your trailing end, you will secure your position.

The Markets to Trade- In You also include to take memo of the commodity market that you deal in. There are seal to forty Futures markets, which have sufficient liquidity to permit for informed movements. Nevertheless, select the marketplace which is suitable with admiration to your explanation size, risk levels & trading technique.

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