Online Commodity Trading means trading in commodities market. Commodity trading is basically investments in activities which are held under the umbrella of commodities market. Commodities can be anything.
They can be gold, silver and even food grains. The demand and supply of the market forces affect the commodity trading. For example, initially silver was available at a very low price. But today due to the increase in its demand, the price of silver is higher than that of gold. The demand-supply forces indirectly also affect the commodities market.
Commodity Trading should not be confused with stock market trading. This is because even though, they both are related to trading, the basic distinguishing factor is the thing that is traded. Commodities market deal with commodities like food grains, etc, stock markets deal with stocks and shares and other investments.
Online Commodity Trading is very convenient. Online features help to simplify the entire process of trading. You can buy and sell the commodities online. You can also hire a broker if you want online. You don t have to physically approach a firm for doing so. Online applications offer a lot of advantage. The cost of their service is also lower.
Commodity Trading has a benefit of easy liquidity. Since the speculators are involved in the market, their force is very strong. This makes commodity market very liquid which is a benefit. But it is not easy to determine how much liquidity the market possesses. It is completely dependent on the type of the contract between he buyer and the seller.
Commodity Trading also has an advantage of leverage. Leverage helps to trade on a margin. It means that the total value of the trading, whatever it is, can be pain partially in cash. Only a small part of it is to be made available in the trading account. Also, in commodity markets one can sell the futures contract with ease. They are easy to buy also. This ease helps to earn great margin of profit.