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Brokerage is charged on a percentage basis for Intraday, Delivery and Futures while the brokerage for Options is calculated on the basis of a flat fee.
Fill in the required details and upload the relevant documents along with a passport size photograph.
Complete the In-person verification (IPV).
Your Demat Account opening is successful with Choice.
Courier us the signed copy of the Power of Attorney (POA) sent on your registered Email ID.
Commodity trades can only be performed only if you open a commodity trading account with a trusted source like Choice. Avail of several benefits like low brokerage on commodity trading and free commodity trading to investing in the commodities suited for your goal, long-term or short-term.
If you are familiar with the nuances of the commodity market, open a free demat account with us and break free from significant annual charges. Minimal DP charges of Rs 10 add to the appeal of our platform and make investing economical and accessible for everyone.
However, if you are new to commodities in general, make investment decisions after extensive research. To make learning more accessible, we have compiled the fundamentals of commodities and the associated commodity trading account to ease your transition into an investor.
The concept of a commodity trading account can be better grasped by understanding the term' commodities.'
Commodities are raw materials or primary agricultural products that can be traded or used for specific applications. Some common commodities include the following.
Certain commodities like rice and wheat are standard household purchases, while precious metals are luxurious. Given that the definition of commodities is clear, we are in a better position to answer the question:
A commodity trading account, or a commodity account, is a consolidated platform for the buying and selling of several commodities and their derivatives. The basic commodity account meaning defines it as an exclusive internet portal for exchanging items - namely gold, energy and agricultural products.
The commodity trading segment has been rising since 2005, reaching a peak value of 1.8 billion options and futures for agricultural materials in 2019. This popularity arises from several benefits associated with commodity trading, as listed below.
Whenever inflation strikes, it leads to an increase in the prices of goods and items around you. Since commodities are primarily raw materials used in everyday products, their price shoots up significantly and helps you balance your portfolio in these trying times.
The simple principle of demand and supply comes into the picture here. When geopolitical tensions between core export regions arise, it causes a shortage of several essential resources. In turn, the demand for raw materials increases exponentially while their supply is limited.
In such cases, the market is expected to take a hit, with company stocks faltering to record-low levels. Investing in certain commodities will help you deal with this better and prevent your portfolio from entering a negative value.
Financial experts constantly stress the importance of investing in multiple investment avenues. However, this is often misinterpreted in diversifying your portfolio concerning company stocks spanning different industrial sectors.
Diversification should span more than a single instrument due to the market's fluctuations. Events like inflation cause high borrowing rates for companies and may cause a decrease in stock value. At times like these, alternate instruments like commodities witness a rise, thereby balancing your overall portfolio.
In the developing country of India, commodities are classified mainly into the following categories.
These four influential groups comprise materials like gold, copper, palladium and wheat, which can be traded using two types of trading in the commodity market.
With the knowledge of all commodity trading essentials, it is time to learn how to do commodity trading.
The primary step of commodity trading in India is creating a Demat account from a trusted broker like Choice. Riddled with advantages like low brokerage charges and a seamless system of paperless account opening, it is the perfect platform to kickstart your investment journey.
After creating the initial Demat account, here are the additional steps to make your first trade.
Each of these instruments has its own merits and demerits. For instance, direct commodities enable you to purchase gold or silver items like coins but possess a high transaction fee. Research wisely and experiment with small sums before making a hefty investment.
You can conduct commodity intraday trading to prevent long-term commitment to commodities. However, intraday trading in commodity comes with a certain amount of risk, and it is preferable to conduct extensive research before trying this option.
Most brokerage platforms allow for intraday trading from Monday through Saturday. While the weekday trading sessions usually start at 10 am and continue until 11 pm, the Saturday session begins at 10 am and closes at 1:30 pm.
Commodity options trading and commodity futures trading comprise a significant chunk of the commodities market. The standard timings for intraday are also applicable for both these options, and you can purchase commodities within the specified time.
For a beginner, it is advisable to check for the following factors before choosing a commodity trading app.
With over 25 years of experience in the field and a host of exciting offers, Choice India supplements its position as one of the best commodity trading platforms in India.
The taxation system in India does not focus on levying a tax on your capital gains. The tax on commodity trading blends your profits from selling the commodities with your existing annual income. You are then asked to add these figures and pay the appropriate tax as per the current tax slabs specified by the Government of India every fiscal year.
The taxes on commodity trading are relaxed compared to stocks, where you have to pay significant sums on booking profits, both on short-term and long-term gains.
Overall, indulging in commodity training is an excellent choice for diversifying your portfolio to combat inflation and geopolitical tensions and also helps you save significantly on taxes.