subject: How To Buy Commodity Online [print this page] Commodities futures are a very fast paced way of making profits in a short period, with the advantage of trading at low margins. It means one can buy large amounts of the futures e.g. gold at just a fraction of the total cost. But you have to be market savvy and follow news on which futures is likely to go up. If you are a seasoned trader in stock futures then it will be a great addition to your stock trading portfolio. Even if you are a novice and looking forward to invest time and money in futures trading, then youll be having a very good time.
Trading now has evolved from small market places to high tech commodity exchanges like the NCDEX (National Commodity and Derivatives Exchange) and MCX (Multi Commodity Exchange of India) with live quotes of its diverse list of commodity and their prices. These two major commodities exchanges, offer a wide variety of investment opportunities in Gold, Silver, Maize, Wheat, Gasoline and many more. Buying futures from a commodities exchange eliminates the hassles of buying a commodity like gold in its physical form and keep it in a safe place, transferring it to another vault etc.
The best thing about trading in futures is that there is no delivery. In equity trading, investors buy and sell shares through a demat account, in which shares are held and are delivered to your demat account. But trading in futures does not require to have a demat account and the brokerage charges are very less compared to trading in the cash segment. The brokerage charges in the cash segment may range from 0.25% to 0.75%. While in brokerage in futures may range from 0.2% to 0.5%.
There are three basic terms of buying a gold futures contract:-
1)You need to buy gold lots specified in the contract
2)Buying the gold lots, at the specified prices of the contract and
3)You buy it before the expiry of the contract.
This may be of one month, two months, three months and so on. You can sell them anytime before the contract expires. You can constantly monitor the MCX and the NCDEX, for live updates and quotes of the commodities just like the prices of shares on the stock market exchanges.
by: Sarika Sheth
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