Commodities – An Exciting Opportunity To Enhance Your Portfolio

By Author: Vamsi Krishna
Total Articles: 27
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In recent years for many investors, commodities as an asset class have gained popularity to be on par with equity, bonds and real estate. Commodity trading/investments have been providing enhanced risk-adjusted returns at a time when equities and bonds have been increasingly volatile. However it is a high risk form of trading that requires the trader to be knowledgeable about the structure of commodity market, economic factors and government policies that affect commodities besides having real time access to information on prices and interpreting them and analysing market trends.

Why Commodities?

Commodity trading is attractive because it offers an opportunity for large short-term profit. As most individual commodities are traded in the form of futures, where what is being traded is not the commodity itself but rather a contract to buy or sell it for a certain price by a stated date in the future. It offers exciting opportunities to investors willing to ride out market volatility in anticipation of rewards.

Diversification: Unlike stocks and bonds, commodities are real assets that exhibit ...
... inherent intrinsic value based on their commercial or industrial application. Their price fluctuation does not have a direct correlation with stock markets and are therefore a good option.

Hedge against inflation: Commodity prices exhibit a positive correlation with inflation – prices generally rise when inflation increases. Commodity trading therefore act as a hedge against inflation.

Protection against geopolitical events: War and supply disruptions due to natural disasters (earthquakes, cyclones and floods) may impact the supply and demand for certain commodities. Thus, inclusion of commodities in a portfolio can act as a potential hedge against certain types of event risks.

Why Edelweiss?

Edelweiss is dedicated to building long term relationships with clients and empowering them to gain from market opportunities. We offer a unique commodity online trading experience across exchanges and market segments through an intuitive commodity trading platform- Edelweiss.in. We offer rich information on commodities, stocks, mutual funds and other asset classes. We provide services backed by research and strategies - customized to our client's investment horizon and trading patterns. The retail broking services are also available from nearly 300 offices across the country and this unique, intuitive and hassle-free online broking portal.

Ability to track asset performance in My Portfolio: Provides a smart tracking tool that helps you monitor your investment portfolio. You can view your investments 24x7 through an easy-to-understand interface that allows you to transact more efficiently.

High quality research: Provides a team of qualified research analysts who track and provide high quality research while advising clients on bullion, base metals, energy and other commodities.

Competitive pricing: Provides attractive brokerage rates and subscription plans for Commodity futures transactions.

Online/Offline platform: Provides a state-of-the-art online platform for commodity trading along with unmatched support and outstanding service through a direct helpdesk.

Ease of fund transferability: Provides instant limits on fund transfer across multiple banks.

Product Features

Access to high quality research, recommendations from Experts and a user friendly platform to invest along with several helpful product features makes Edelweiss the preferred choice. (Read More)

Intraday Product: Provides intraday online trading facility wherein you take a position on a commodity and release it before the end of the day's trading session. This enables profits through buy-sell or sell-buy exercises in one day.

Leveraged position: Provides freedom to trade without hassles throughout the day. You can take a leveraged position of up to 4 times for intraday trades.

Research reports: Provides online access to various fundamental and technical research reports on a daily, weekly and monthly basis through an efficient in-house research desk.

Intraday strategies: Provides access to a broad range of intraday strategies based on the objective of gaining from daily market volatility. Benefit from actionable strategies that suit your profile, risk appetite and investment pattern.

Fungible limits on stock holding: Provides flexible limits on stock holdings across various asset classes. Enjoy fungible limits on stock holding i.e. the stock holding limits used for stocks/shares, currency, derivatives or any other asset class can be utilized for commodities.

Multi-exchange trading: Edelweiss is a member of the Multi Commodity Exchange of India Ltd. (MCX) and National Commodity and Derivatives Exchange of India (NCDEX), thus allowing multi-exchange trading in a wide variety of commodities.

FAQs

What is a commodity?

A commodity is a product that has commercial value, thus allowing it to be produced, bought, sold and consumed.

What is a Commodity Exchange?

A Commodity Exchange is a common platform that allows market participants from various fields to trade in a wide range of commodity derivatives.

Which is the regulatory body for commodities trading?

The Forward Markets Commission (FMC) is the regulatory body for commodity futures/forward trade in India.

Who is eligible for opening a commodity trading account?

Any individual, Hindu Undivided Family (HUF), proprietary firm, partnership firm or a company can open a commodity trading account.

How do I transfer funds?

Log in to https://commodities.edelweiss.in and select the ‘Fund Transfer’ tab. This will display your primary bank account number. You should select the recipient account from the list of available bank accounts, enter the amount to be transferred and click on ‘Submit’. Log in to the corresponding bank account and confirm the payment. Check the limits page to see if the amount displays correctly under the ‘Pay-in’ column.

How do I place trade?

Once you’ve noticed the amount of limits available, you need to confirm the margin required to place a trade on any commodity. Log in to your account and click the ‘Margins’ tab – the margin requirements for commodities will be made available based on the exchange (MCX/NCDEX).

Now that you know the margin requirement for your desired contract, simply click on the ‘Buy/Sell’ tab, enter the details, and click ‘Submit’. First, you will be taken to an order confirmation page and then to your order book on successful confirmation of the order.

How do I monitor my Trade?

Trade Book:

The primary means of monitoring your trade on https://commodities.edelweiss.in is through the Trade Book. Here you can see any trade performed by you in the day. You can also view the ‘Trade History’ of all trades performed by you in the financial year.

Position Book:

You can keep track of any open positions you may have created as a result of trading. You can avail a one-click square-off of your positions by selecting the position and pressing the ‘Position Square-off’ tab, this will allow you to square-off the position at the market rate or any rate you specify.

How do I track my investments in commodities?

You can keep a track of your profits/losses in the commodities segment by accessing the ‘My Portfolio’ page on https://commodities.edelweiss.in. You can track the Profit/Loss on a trade-to-trade level basis, and is a unique feature offered by Edelweiss.

How will I get a trade confirmation?

You will receive an SMS for all your successful trade confirmations and an email as soon as you place a trade.

Can I place an After Market Order?

After Market Orders can be placed during off market hours and will get placed on the market opening of the next business day.

What are the exchange timings?

Commodities Trade Timings are as follows:-

Monday-Friday: 10 am-5 pm (All commodities)

Monday-Friday: 5 pm to 11:30 pm (All commodities except Agri) (Summer)

Monday-Friday: 5 pm to 11:55 pm (All commodities except Agri) (Winter)

Saturday: 10 am to 2 pm (All commodities)

Promotions

Win a free Subscription to Xtreme Trader, the advanced trading terminal from Edelweiss.

Contact Us

E-mail us at comtradehelp@edelweiss.in or

SMS COMTRADE “your query” to 5757590 or

Call us Toll Free on 1-800-102333

Author Bio

Ritish Kumar is a finance enthusiast and a keen observer of the Indian share market. In this series of articles, he talks about investing in stock market and staying profitable. commodities
, mutual funds, fundamental and technical research