InvestorQ : HOW IS COMMODITY TRADED
TARUN made post

HOW IS COMMODITY TRADED

Answer
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ishika Banerjee answered.
1 year ago


Commodity in either traded in physical market wherein the delivery of the commodities that actually happens as a result of buying and selling of commodities. However, trading commodity in stock exchange is all-together a different experience. Commodity trading in stock exchange generally doesn't include delivery of physical commodities, instead settled through paying or receiving of loss and profit payment of amount difference.

Commodity trading generally is through Derivatives market, that to with Futures and Options wherein contract are bought and sold with margin price. One can trade only those agricultural commodities and metals like Gold, Silver, Zinc, etc. that are listed on exchange with a standardization in buying and selling. Generally, these contract have expiry to the last Thursday of every month.