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Why invest in Commodity Account

1.Easy Transactions

You can buy and sell commodities very fast. All transactions are electronic. There is no need of physical buying and selling of commodities.

2.Diversification

Traditionally the prices of commodities move in a direction opposite to equity. Commodities are a good alternate investment.

3.High Liquidity

You can easily buy and sell commodities unlike real estate. There is always a buyer and a seller for the commodity

4.Margin Finance

Invest only a fraction of the cost of the commodity and take home huge profits, through margin financing.

The forward market commission (FMC) functions as a regulatory authority in the commodity market. The National Commodity and Derivative Exchange (NCDEX), Multi-Commodity Exchange (MCX) and National Multi Commodity Exchange (NMCE) are the commodity exchanges present in India

In order to open a commodity account you need to submit an address and an identification proof, such as a copy of the voter's card or the passport, a bank account statement, copy of the PAN card which form a part of the know your customer (KYC) norms. This is similar to the opening of a demat account in the equity market.

A trading account will have to be opened with National Spot Exchange Limited (NSEL) and a demat account with a depository such as National securities depository limited.

A minimum amount of INR 5000 is sufficient to trade in most commodities. The brokerage charges are in the range of 0.1-0.3% of the contract value. Transaction charges are in the range of INR 5-10 per Lakh per contract. The brokerage varies based on the type of commodity

Commodity markets are markets where raw or primary products are exchanged. Indian commodity market consists of both the retail and the wholesale market in the country. Commodity trading is one facility that investors can explore for investing their money. One can trade these commodities by having commodity trading account