Commodity trading was first started to protect farmers from the risk of facing losses beyond the cost price of their crop.
So, contracts on various agricultural products such as wheat, cotton, pepper, rice, etc. were offered such that the buyer and the seller agree upon a price for the commodity. With the seller being obliged to deliver by or before a certain date which will certainly be different for different commodities because of difference in their usage, production, and demand.
Commodities are natural resources used in our day to day lives and based on the supply, demand, and production of the same should the expiry be fixed.
In a commodity market, an agreement is an obligation to make or acknowledge delivery at the contracted price, of a precise amount and specific quality of a commodity during a specific month in future. The price is the one settled upon when the pledge is made.
Often you’ll find different commodities having different expiry dates, and no standard mechanism is found for the same for it’s not needed and different commodities may require a different time period for the contract fulfillment.
For, e.g., gold and silver can have a different temporal contract than agricultural products as the latter needs a certain time to be nurtured and harvested and the time period of the contract will be fixed accordingly and hence a different expiry date.
The expiry dates need not burden you much with much speculation about them. You just need to go with the production or ‘ripening’ time of the commodity in question.
To become successful in trading, one needs to understand the importance of trading and should learn about the rules that made for all types of traders. Every rule alone is important in trading and when they work together the results are unbelievable. Trading by following certain rules can help investors to earn a better income in the market.
Following are the main rules to become successful in the market -
- Plan your trade
- Use latest technologies
- Always try to learn something new
- Risk only what you can afford
- Know when to start and when to stop trading
Many technologies like high-speed internet connections, can greatly contribute to increasing trading performance. Many leading advisors provide trading tips like stock tips, gold and silver tips and much more on social media platforms to promote their services. This is an another example technology is really useful for the traders.
Commodity futures price= spot price on expiry date. Unfortunately india do not control any pricing fixing spot for metals or energy. The futures price is settled in US & UK markets considered as bench mark for mcx settlement. So expiry dates differs for commodities.more. Visit commodityra. com to know more…