Mcx options trade

Select basic ads. Create a personalised ads profile. Select personalised ads.

Option Chain

Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. A commodity futures contract is an agreement to buy or sell a predetermined amount of a commodity at a specific price on a specific date in the future. Commodity futures can be used to hedge or protect an investment position or to bet on the directional move of the underlying asset.

Many investors confuse futures contracts with options contracts. With futures contracts, the holder has an obligation to act. Unless the holder unwinds the futures contract before expiration, they must either buy or sell the underlying asset at the stated price. Commodity futures can be contrasted with the spot commodities market.

Most commodity futures contracts are closed out or netted at their expiration date. The price difference between the original trade and the closing trade is cash-settled. Commodity futures are typically used to take a position in an underlying asset. Typical assets include:. Commodity futures contracts are called by the name of their expiration month meaning the contract ending in September is the September futures contract. Some commodities can have a significant amount of price volatility or price fluctuations.

As a result, there's the potential for large gains but large losses as well.

Commodity futures and commodity forward contracts are functionally similar. The major difference is that futures are traded on regulated exchanges and have standardized contract terms.

• How to Trade In commodity | What is Commodity | Commodity trading In India.
• Hunt for an answer & explore.
• free forex trend reversal indicator.
• free autotrader forex.
• MCX unveils India's first option trading in gold on Dhanteras!

Forwards instead trade over-the-counter OTC and have customizable terms. Commodities futures contracts can be used by speculators to make directional price bets on the underlying asset's price. Positions can be taken in either direction meaning investors can go long or buy as well as go short or sell the commodity. Commodity futures use a high degree of leverage so that the investor doesn't need to put up the total amount of the contract. Instead, a fraction of the total trade amount must be placed with the broker handling the account. The amount of leverage needed can vary, given the commodity and the broker.

The trades would settle through the investor's brokerage account crediting the net difference of the two contracts.

Most futures contracts will be cash-settled, but some contracts will settle with the delivery of the underlying asset to a centralized processing warehouse. Considering the significant amount of leverage with futures trading, a small move in the price of a commodity could result in large gains or losses compared to the initial margin.

Speculating on futures is an advanced trading strategy and not fit for the risk tolerance of most investors. Unlike options, futures are the obligation of the purchase or sale of the underlying asset. As a result, failure to close an existing position could result in an inexperienced investor taking delivery of a large quantity of unwanted commodities. Trading in commodity futures contracts can be very risky for the inexperienced.

The high degree of leverage used with commodity futures can amplify gains, but losses can be amplified as well. If a futures contract position is losing money, the broker can initiate a margin call , which is a demand for additional funds to shore up the account.

Further, the broker will usually have to approve an account to trade on margins before they can enter into contracts. As mentioned earlier, most speculation futures cash settle. Another reason to enter the futures market, however, is to hedge the price of the commodity.

Businesses use future hedges to lock in prices of the commodities they sell or used in production. Commodity futures used by companies give a hedge to the risk of adverse price movements. The goal of hedging is to prevent losses from potentially unfavorable price changes rather than to speculate. Many companies that hedge use or producing the underlying asset of a futures contract. Examples of commodities hedging use include farmers, oil producers, livestock breeders, manufacturers, and many others. For example, a plastics producer could use commodity futures to lock in a price for buying natural gas by-products needed for production at a date in the future.

The price of natural gas—like all petroleum products—can fluctuate considerably, and since the producer requires the natural gas by-product for production, they are at risk of cost increases in the future. If a company locks in the price and the price increases, the manufacturer would have a profit on the commodity hedge. The profit from the hedge would offset the increased cost of purchasing the product.

Also, the company could take delivery of the product or offset the futures contract pocketing the profit from the net difference between the purchase price and the sale price of the futures contracts. Hedging a commodity can lead to a company missing out on favorable price moves since the contract is locked in at a fixed rate regardless of where the commodity's price trades afterward. Also, if the company miscalculates their needs for the commodity and over-hedges, it could lead to having to unwind the futures contract for a loss when selling it back to the market.

Emergency Dealing Helpline for Call and Trade. Change in Market Timings and Sqr off timings!

• Awareness Corner;
• book my forex kolkata office address!
• ghostscript color conversion strategy.
• Commodity Futures Contract Definition!
• Circulars | Alice Blue | NSE, BSE and MCX circulars.

AP agreement in Rs. Franchise Payout Guidelines. Swift Payout in Timings. No login. No charges. Explore Sensibull for free! Franchisee Payout Eligibility Criteria. Importance about MTF Declaration. Whatsapp Alerts in Sensibull. Introducing Alice Algo- Live on Sep Franchiese Incentive Policy Update. Categorization of clients based on commodity - MCX. Notice Board for Aliceblue Franchiese. Aliceblue Youtuber Incentive Policy.

Facebook considering cryptocurrency-based payment system: Reports

Incentive Plan for Franchisee. BOT Web application is on Live. TextUnion Budget Sub Broker Policy.