क्या है Commodities market और क्यों हमें जानना चाहिए? | #Learn2Trade Session 9

Summary

In the 9th Learn2Trade video, Vivek Bajaj discusses the importance of understanding commodities for young traders. He explains the basics of commodities, their utility value, and how they're traded in markets like MCX and NCDEX. Bajaj emphasizes the significance of demand and supply laws in commodities, contrasting them with equity markets. He also touches on the role of the dollar index in global commodity trading, particularly for gold, and how it influences prices in Indian markets. The video serves as a foundational guide for those interested in trading commodities, especially gold.

Takeaways

• 😀 The Learn2Trade series by Vivek Bajaj aims to educate, especially youngsters, about trading with a foundation in basic concepts.
• 📚 It's recommended to watch all previous videos for a comprehensive understanding before proceeding to the current one.
• 🤝 Annapurna, a learner in the series, has been applying the teachings and is now focusing on sector rotation and commodities trading.
• 🌟 Commodity trading is highlighted as a potential starting point for a trading career due to its educational value and market efficiency.
• 💰 The law of demand is particularly evident in commodities and currency, unlike in equity markets where it can be distorted.
• 📉 The video discusses the importance of understanding the difference between forward and futures contracts in commodity trading.
• 🌐 The MCX (Multi Commodity Exchange) is introduced as India's primary platform for non-agricultural commodity derivatives trading.
• 📊 Market data and contract specifications are crucial for trading commodities, and the MCX website is a key resource for this information.
• ⏰ The timing of commodity trading is emphasized, with markets being open from 9 AM to 11:30 PM, offering opportunities for traders.
• 🌐 The influence of global instruments like the US dollar and the Dollar Index (DXY) on commodity prices, especially gold, is discussed.
• 💡 The script underscores the need to consider both international prices and currency movements when trading commodities in India.

Q & A

What is the main purpose of the Learn2Trade series?

The main purpose of the Learn2Trade series is to educate and build a foundation for individuals, especially youngsters, who are passionate about learning and trading in the market.

Who is Annapurna in the context of the video series?

Annapurna is a participant in the series who has been learning from Vivek Bajaj and is expected to provide a trading call based on the teachings and concepts discussed in the series.

Why does Vivek Bajaj believe commodities are a good starting point for a trading career?

Vivek Bajaj believes commodities are a good starting point for a trading career because they teach the whole game of trading and are less prone to distortions like insider trading, which is more common in equities.

What is the difference between a forward contract and a futures contract as explained in the video?

A forward contract is a flexible agreement between two parties to buy or sell an asset at a specified future date and price. A futures contract, on the other hand, is a standardized contract traded on an exchange with fixed expiry dates and terms.

What are the two major commodity derivative exchanges mentioned in the video for trading in India?

The two major commodity derivative exchanges mentioned are MCX, which largely deals with non-agri commodities, and NCDEX, which focuses on agri commodities.

Why is it important to understand the contract specifications before trading in commodities?

Understanding the contract specifications is crucial because it provides details on the terms of the contract, including delivery dates, sizes, and other conditions, which are essential for making informed trading decisions.

How does the law of demand apply to commodities and currency?

The law of demand applies to commodities and currency by stating that when demand is high and supply is constant, the price goes up, and vice versa. This is because commodities and currency are widely held instruments without insiders, making the market forces more transparent.

What is the significance of the dollar index (DXY) in trading commodities like gold?

The dollar index (DXY) is significant in trading commodities like gold because it represents the strength of the US dollar against a basket of major currencies. Since gold is often priced in dollars, the index can influence gold prices, as a weaker dollar can lead to higher gold prices and vice versa.

Why might the price of gold in India differ from the international price?

The price of gold in India might differ from the international price due to currency conversion rates, as gold is priced in dollars internationally but traded in rupees in India. Fluctuations in the value of the rupee against the dollar can affect the price of gold in the Indian market.

What is the role of the spot market in commodity trading as discussed in the video?

The spot market in commodity trading serves as a reference for the current price of the commodity. It is a decentralized market where commodities are bought and sold for immediate delivery, and its price is used as a benchmark for futures contracts.

Why is it recommended to track the international price of gold along with the rupee's movement when trading gold in India?

It is recommended to track the international price of gold along with the rupee's movement because the Indian gold price is influenced by both the global gold price and the strength of the Indian rupee. Changes in either can affect the final price at which gold is traded in the Indian market.