Commodities Market

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Commodities are raw materials like
rice, wheat, pulses, goldsilver, copper etc.

Soft commodities and hard commodities.

Many categories in commodities.
Most traded are natural gas and crude oil.

Better to trafe in smaller quantities
and be very picky
and dont hold trades for long periods.

Exchanges
MCX - Multi Commodity Exchange

Timings
9 am - 11:30 pm

Best Time to Trade
5 pm - 8 pm

Natural Gas
1 Lot = 1250 Quantity

Tick Size = 0.1 Rupees
(Minimum price movement of an asset)

For Example
If current price is 45.1,
if it increases by 1 point
its 45.20
and if it increases 1 point again
its 45.30

Min P/L = +/- 125 rupees
(The least amount of profit/loss
that means for a 0.1 rupees change)

Big profits and Big Losses

For Example
If bought at 45.1 and sold at 45.2
then profit is 0.1 point thus profit is 125 rupees
and if bought at 45.1 and sold at 46.1
then profit is 1 point thus profit is 1250 rupees
And so if its 2 points profits unsteady of 1 point
thus profit is 2500 rupees instead of 1250 rupees

Global Chart : CapitalComm
Indian Chart : MCX

3 months futures available
and more than 60000 needed to buy

Expiry date is on 19th or 20th
of every month is because
its the 3rd business day before 25th

Upto 6 monthly contracts

There are Natural Gas mini contracts
which has small lot size

Natural Gas mini lot sized : 250 quantity

EIA(Energy Information Administration)

Inventory data is released by EIA

Inventory data for Natural Gas released on
Thursday around 8-9 pm

Better not to trade
on Thursday for Natural Gas

Big Price Shift normally happens during
release of Inventory Data
because unexpected market moves on this day

Liquidity Grabs
happen very common in commodities
especially in evening hours

CRUDE OIL

Brent and WTI in crude oils
WTI(West Texas Intermediate)

In India normally uses WTI crude oil

Lot size = 100 quantity
Tick size = 1 rupee
(Minimum movement)
Min P/L = +/- 100 rupees

Global chart = WTI chart
Indian chart = MCX chart

Inventory day = Wednesdays from 8-9 pm
Evening time from 5 pm - 9 pm
very active for Liquidity Grabs

Stay away from trade on Wednesdays