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Benefits of Commodity Trading

Transparency: There are no company specific news attached with the commodity market. Dealing in commodities is free from insider trading and hence a fair trading is ensured.
Low Margins: Trading in commodity market demands low margin amount, roughly 5 to 10% of the total value of the contract. This is much lower compared to other asset classes. The low margin facilitates initiating large positions at lower capital. This provides an investor more leverage and thus the ability to generate higher returns.
Simple Economics: Knowledge of simple economics of demand and supply is what is required to trade in it. More the demand for a commodity higher is its price and vice versa.
Inherent Intrinsic Value: Commodities have an intrinsic value, purely based on demand and supply in the economy. The prices of most agricultural commodities offer good potential for upside as the land availability dwindles and consuming population increases.
Investor’s bias for Precious Metals: Precious metals such as gold and silver have always been the favorite of investor fraternity since centuries. It makes sense to allocate a part of your investment in commodities for diversification as well as to add more flavour to your portfolio.
Huge Potential: Commodity exchanges witness a sizeable daily turnover worldwide, unlocking a huge potential to earn money.
Growing demand of commodities from various emerging economies like India and China for their infrastructure development is attracting more participants.

Benefits of Commodity Trading

Transparency: There are no company specific news attached with the commodity market. Dealing in commodities is free from insider trading and hence a fair trading is ensured.

Simple Economics: Knowledge of simple economics of demand and supply is what is required to trade in it. More the demand for a commodity higher is its price and vice versa.

Inherent Intrinsic Value: Commodities have an intrinsic value, purely based on demand and supply in the economy. The prices of most agricultural commodities offer good potential for upside as the land availability dwindles and consuming population increases.

Investor’s bias for Precious Metals: Precious metals such as gold and silver have always been the favorite of investor fraternity since centuries. It makes sense to allocate a part of your investment in commodities for diversification as well as to add more flavour to your portfolio.

Huge Potential: Commodity exchanges witness a sizeable daily turnover worldwide, unlocking a huge potential to earn money.

Growing demand of commodities from various emerging economies like India and China for their infrastructure development is attracting more participants.