Being the India’s largest Multi commodity futures exchange, MCX handles the clearance & settlements of exchange. Besides Gold, other nonferrous metal & bullion (silver), agricultural commodities (oil, cardamom, cotton, etc.) and energy are part of the traded items. The MCX has opened the Indian market for retail investors to participate fully in the commodity derivatives. The market is a great investment for traders who wish to diversify their portfolio beyond the bonds, shares and real estate.
Before you venture into the commodity futures market, it’s important to be conversant on how the market operates. The 3 multi-commodity exchanges enable retail investors to trade in commodity futures without necessarily having physical stocks. Here are some vital tips on how the market operates!
For a beginner who has a keen interest in commodity (Gold) futures trade; there are 3 options in the country to get you started. These are; The Multi-commodity Exchange of India, National Commodity & Derivative Exchange and the National Multi-Commodity Exchange of India. The next step is to choose a broker. A lot of equity brokers are available and you can choose any depending on your taste and preference.
The minimum investment needed depends on the commodity you want to trade in. The money you need is the payable up front for exchange through brokers. Different brokers have varying packages for their clients. Bullion trading, gold & silver will require a minimum of Rs. 650 (per 10 gm) and Rs 950 (per Kg) for one trading unit of Gold and Silver respectively.
At the broker level, you’ve to enter into a normal account agreement. These include all the procedures of the Know your Client format. You’ll also need to give some details such as the Bank account no. and the PAN no. The brokerage and transaction charges shouldn’t exceed the maximum limits specified by the Exchange. To get some updated information on the gold trading, it’s important to have a regular visit to some of the trusted gold trading websites. Such websites can be subscription based while others offer the information for free.
Forward Markets Commission is the sole regulator; the brokers don’t need to register themselves with the regulator. It, therefore, follows that the exchanges are more self-regulating as compared to the stock exchanges. This, would, however, change if the retail participation in commodity grows substantially. The availability of circuit filters helps to regulate the price fluctuations of Gold and other commodities beyond the limit.
You can watch live mcx at http://www.livemcxdata.in/ while Gold trading in India.