Source: BL
Context:
Stock broker Groww has introduced commodities trading for its users, expanding beyond equities and mutual funds. The service is available for customers with active trading accounts.
Commodities Trading
Commodities trading involves buying and selling raw materials or primary agricultural products in standardized contracts through commodity exchanges. Unlike stocks or mutual funds, which represent ownership in companies or pooled assets, commodities are physical goods or their derivatives.
Types of Commodities:
- Metals: Gold, silver, copper, aluminium.
- Energy: Crude oil, natural gas, coal.
- Agricultural: Wheat, rice, sugar, coffee, cotton.
- Others: Rubber, spices, palm oil.
How It Works:
- Investors can trade spot (cash) contracts for immediate delivery or futures contracts for delivery at a later date.
- Commodity prices are influenced by global supply-demand dynamics, weather conditions, geopolitical events, and currency fluctuations.
- Exchanges like MCX (Multi Commodity Exchange of India) and NCDEX (National Commodity & Derivatives Exchange) provide a platform for such trading.
