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Equity & Commodities

Navigate the Markets with Confidence

Understanding Commodities Trading
 
Commodities trading involves buying and selling raw
materials or primary agricultural products such as metals,
energy, and food items. These commodities are traded
on exchanges like the Multi Commodity Exchange (MCX)
and the National Commodity & Derivatives Exchange 
(NCDEX) in India.
 
Types of Commodities

Commodities are broadly classified into:

  1. Metals: Gold, silver, platinum, copper, aluminum, etc.

  2. Energy: Crude oil, natural gas, gasoline, coal, etc.

  3. Agricultural Products: Wheat, rice, coffee, sugar, soybeans, etc.

  4. Livestock: Cattle, pork bellies, milk, etc.


How Commodities Trading Works

Commodities can be traded in two main ways:

  • Spot Market: Buying and selling commodities for immediate delivery.

  • Futures Market: Trading standardized contracts where commodities are bought or sold at a future date at a pre-agreed price.


Benefits of Commodities Trading
 

  • Portfolio Diversification: Helps spread risk and reduce dependency on stock markets.

  • Hedging Against Inflation: Commodity prices often rise with inflation, making them a good hedge against currency depreciation.

  • High Liquidity: Many commodities have active markets, allowing traders to enter and exit positions easily.

  • Leverage Opportunities: Traders can control large contract sizes with a relatively small investment.


Risks in Commodities Trading
 

  • Price Volatility: Commodity prices fluctuate due to geopolitical events, weather conditions, and supply-demand imbalances.

  • Leverage Risk: High leverage can amplify gains but also lead to significant losses.

  • Storage and Delivery Issues: Physical commodities require logistics and storage, adding extra costs for direct buyers.

Introduction to Equity and Commodities

  • Equity: Represents ownership in a company, offering potential returns through dividends and capital appreciation.​

  • Commodities: Involve trading tangible goods like metals, energy, and agricultural products, with prices influenced by supply and demand dynamics.

Equity trading and investment involve buying and selling shares of publicly listed companies in the stock market. When you invest in equities, you become a shareholder, meaning you own a portion of the company. The goal of equity investment is to generate returns through capital appreciation (rise in stock prices) and dividends (profit distribution by companies).
 

Understanding Equity Trading
 

Equity trading refers to the process of buying and selling
stocks through stock exchanges such as theNational Stock

Exchange (NSE) and Bombay Stock Exchange (BSE) in India.
Traders use different strategies, including:
 

  • Intraday Trading: Buying and selling stocks within
    the same
    trading day to capitalize on short-term price movements.

  • Swing Trading: Holding stocks for a few days or weeks to
    profit from market fluctuations.

  • Long-Term Investing: Holding stocks for years to benefit
    from long-term growth and compounding returns.



Benefits of Equity Investment
 

  • Wealth Creation: Equities have historically provided higher returns compared to traditional investment options like fixed deposits and bonds.

  • Dividend Income: Many companies distribute a portion of their profits as dividends to shareholders, providing passive income.

  • Liquidity: Stocks are easily tradable, allowing investors to buy or sell as needed.

  • Portfolio Diversification: Investing in different companies and sectors reduces risk and improves financial stability.
     

Risks Involved in Equity Trading
 

  • Market Volatility: Stock prices fluctuate due to economic, political, and company-specific factors.

  • Risk of Loss: If the stock price falls, investors may face capital loss.

  • Liquidity Risks: Some stocks may have low trading volumes, making them difficult to sell at desired prices.

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How to trade in Equity and Commodities?

KYC

  • Fill KYC Form – Online (e-KYC) or offline.

  • Submit Documents – PAN (mandatory), Aadhaar, Address & Income Proof (if required).

  • Verify – Aadhaar OTP (e-KYC) or in-person verification.

  • Approval – Processed by KYC Registration Agencies (KRA).

  • Start Investing – Once approved, begin trading.

Add Funds

  • Add Funds using the same bank account used in KYC process

  • Funds can be added using NEFT/RTGS, UPI, Netbanking, or by Cheque 

  • No CASH

Choose and trade

  • Choose and analyse from thousands of stocks or commodities.

  • Study the business and fundamentals of the company

  • BUY or SELL the desired stock or commodity according to your analysis

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