Equity & Commodities
Understanding Equity Trading
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Equity trading refers to the process of buying and selling
stocks through stock exchanges such as the National Stock Exchange -
Exchange (NSE) and Bombay Stock Exchange (BSE) in India.
Traders use different strategies, including:
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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.
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:
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Metals: Gold, silver, platinum, copper, aluminum, etc.
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Energy: Crude oil, natural gas, gasoline, coal, etc.
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Agricultural Products: Wheat, rice, coffee, sugar, soybeans, etc.
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Livestock: Cattle, pork bellies, milk, etc.
How Commodities Trading Works
Commodities can be traded in two main ways:
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Spot Market: Buying and selling commodities for immediate delivery.
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Futures Market: Trading standardized contracts where commodities are bought or sold at a future date at a pre-agreed price.
Benefits of Commodities Trading
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Portfolio Diversification: Helps spread risk and reduce dependency on stock markets.
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Hedging Against Inflation: Commodity prices often rise with inflation, making them a good hedge against currency depreciation.
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High Liquidity: Many commodities have active markets, allowing traders to enter and exit positions easily.
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Leverage Opportunities: Traders can control large contract sizes with a relatively small investment.
Risks in Commodities Trading
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Price Volatility: Commodity prices fluctuate due to geopolitical events, weather conditions, and supply-demand imbalances.
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Leverage Risk: High leverage can amplify gains but also lead to significant losses.
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Storage and Delivery Issues: Physical commodities require logistics and storage, adding extra costs for direct buyers.
Introduction to Equity and Commodities
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Equity: Represents ownership in a company, offering potential returns through dividends and capital appreciation.
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Commodities: Involve trading tangible goods like metals, energy, and agricultural products, with prices influenced by supply and demand dynamics.
How to trade in Equity and Commodities?
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:
-
Metals: Gold, silver, platinum, copper, aluminum, etc.
-
Energy: Crude oil, natural gas, gasoline, coal, etc.
-
Agricultural Products: Wheat, rice, coffee, sugar, soybeans, etc.
-
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.
KYC
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Submit Documents – PAN (mandatory), Aadhaar, Address & Income Proof (if required).
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Verify – Aadhaar OTP (e-KYC) or in-person verification.
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Approval – Processed by KYC Registration Agencies (KRA).
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Start Investing – Once approved, begin trading.
Add Funds
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Add Funds using the same bank account used in KYC process
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Funds can be added using NEFT/RTGS, UPI, Netbanking, or by Cheque
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No CASH
Choose and trade
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Choose and analyse from thousands of stocks or commodities.
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Study the business and fundamentals of the company
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BUY or SELL the desired stock or commodity according to your analysis