Commodity Future Trading in India

After a long confinement of legal restrictions commodity market is now performing freely and is rapidly gaining popularity. Since …….. it has caught the attention of the traders. The market of commodity futures is explained as a constant auction market providing the latest information about supply and demand with respect to individual commodities.

The primary driving force behind the commodities futures market is its effective mechanism of managing the price risk. Traders can prevent themselves from adverse price shocks through buying and selling future contracts today, for the items to be delivered tomorrow.

The readers might feel that price risk management is the sole objective of the traders in a commodity market.

In fact, when classified broadly, the traders in the commodity futures market have two classes; hedger and speculator. Hedgers, through trading, protect themselves against unfavorable price changes which might occur in the meantime. The hedgers establish a known price for a specified period of time in advance for products they want to buy or sell in the cash market. The speculators, forming the other class, are investors with high speculative skills. They trade with the purpose of gaining from the change in the price of the commodities. They are not interested in taking the delivery of the underlying commodity in the futures contract.

Interaction between the hedgers and the speculators helps in providing liquidity and competitiveness of the commodity markets.

So far the article provides just an overview of the commodities futures market. Although the futures trading is performed with the hope of waiving off the risk yet it is a risky business. Here is where the role of advisors comes into the picture. Presently there are a plenty of advisory services offered by the broking houses. Choosing the broking house may seem a little tough in the beginning. It is always recommended to select the broking house that comes with an excellent advisory team; efficient advisory team is well ensured by the research work carried by the broking firm.

In this regard, Angel Broking holds the largest extensive research team, producing weekly and monthly reports on the market, technical analysis reports to follow the indices perfectly and also forecasting reports for more in-depth knowledge.

For the convenience of the traders, Angel offers three different online platforms for online trading in the commodity market. Any client of Angel is well armed against the unprecedented shocks in the futures market since his trading is backed with expert advices. The online trading platforms offered are user-friendly and are coupled with a number of features to allow a trader utilize the entire trading hours. The greatest advantage of Angel is its back office support which is available 24 hours a day, 7 days a week.

With so many options of help available, it is less likely for risk to penetrate in futures trading.