For all those who start their trading journey, the primary question is selecting the type of security they should be trading. Contrary to the Indian markets, which are dominated by trading in equities, currencies and commodities have a big share in the trading pie in global markets. In fact, currencies are the most traded asset class in the world followed by others like commodities, bonds, and equities. Trading in commodities can be equally rewarding as trading in equities. Below are some of the advantages of trading in the commodities markets:

Lower Margin Requirements

Unlike equities that require a trader to maintain higher margins, commodities trading require a trader to maintain a margin of just 5 percent. This simply means that traders can reap higher rewards with low investment.

copper trading in india

Smaller Lot Sizes

As options trading is still not permitted in India, major commodities exchanges in India like MCX and NCDEX have introduced mini and micro contracts for many commodities like Silver, Copper, Zinc, and Lead. Smaller contract sizes allow customers to enter the markets with less cash and gradually increase their capital. For example, trading in the Silver Micro contract requires as little intraday margin as Rs. 1,250. Lower margins also limit the losses for new traders till they gain experience. The recently launched Crude Oil mini contract (intraday margin requirement of just Rs. 1,342) on MCX has been attracting a lot of attention and is on the way to beat the volumes of the main Crude Oil Contract on MCX.

Extended Trading Hours

Equities are traded for just 6 hours every day. It is not possible for traders with regular day time jobs to monitor the charts of equities during the office hours. In contrast, commodities are traded for long hours in India and abroad. While the agricultural commodities are traded from 9.00 AM to 5.00 PM, nonagricultural commodities are traded from 9.00 AM to 11.30 PM. Extended trading hours make it possible for people with regular jobs to monitor and analyze the charts while putting orders.

Limited Factors Impacting the Price

Prices of commodities are simply impacted by their demand and supply in the market. In contrast, prices of equities are impacted by multiple factors that are difficult to track. Prices of commodities can also be easily tracked through technical analysis.

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Information Availability

The volume of information on equity indices, independent equities, and currencies traded on the Indian bourses is limited. However, international websites like and provide lot of information related to international commodities. Since, the energy and metals that are traded on the Indian commodity bourses track the international prices, it is easy to get information that will impact their price movement.

The above factors should be enough for you to start trading in the commodities markets. Indian commodity markets have been experiencing downturn due to reasons like pickup in the equity markets, CTT, and the fraud in National Spot Exchange Limited. Trading in commodities is bound to improve in future as the government has started taking steps to change the situation.