How to choose Best Commodity Broker in India

Aug-14-2020Blog by – Mr. Dhruv AjmeraRead Time: 3 Min.Word Count: 687
194How to choose Best Commodity Broker in India

You might have ventured into stock market, Mutual funds, real estate, and equities but commodities are also a focus for active traders. Now… what exactly is a commodity?

A commodity is a raw material or agricultural produce that is cultivated. Crude oil and gold are some of the most common commodities that are traded. These commodities are traded and exchanged on cash markets or as standardized futures exchanges.

The process of futures exchange can be a lot more complicated than the trading itself. Any seasoned trader in the stock market would be able to get a hang of commodity trading quickly but they might want to look out for commodity brokers in India.

The commodities broker will simply sell and buy the futures contracts on behalf of their client, in lieu of a commission or brokerage. An amateur commodity trader must hunt for the best commodity broker so that they can have a comfortable journey in trading in the commodities’ world.

But how does one look for the best commodity broker? Here are some pointers:

  1. Make a list
    Start off your hunt of a commodity broker in India by making a list of all brokers available including all the ones who do commodity trading online. Shortlist the brokers based on their reviews on different platforms. Who knows, you might find some material where someone has already done research on the best commodity brokers!

  2. Check History
    Once you have shortlisted, let`s say, top 5 commodity brokers in India, you can start doing more in-depth research on each organization or company. Check how long they have been in the industry. Along with this, be on the lookout for their regulatory history, the number of clients they serve, what their portfolio and profits typically look like. Keep on adding these details to your list of commodity brokers in India so that you can evaluate and choose by looking at the comparison right in front of you.

  3. Choice of trading platform
    Now there are many new and efficient trading platforms that can make one’s trading experience better. Online commodity trading has become common in India too and one can hunt and ask the brokers for what tools and platforms they use to make your trading experience more comfortable. An online platform with some level of autonomy usually works very well for most people. We say this often: check all out but choose only the best commodity broker!

  4. Know what you want
    While the above mentioned online platforms work well for the seasoned trader, if the commodities world still seems fresh and daunting to you, you might want the trader to assist. If you want to make this long-term, you might want to have a managed portfolio. You can speak to different people in your trading groups, people who have traded in commodities before, and understand the pros and cons of each choice.
    Once you have done that, you would be able to make your goal crystal clear and find the commodity broker in a much more streamlined fashion, even in a vast country like India.

  5. Check the brokerage
    Once you have ticked off the above checkpoints, you need to see if the best commodity broker even fits in your budget or not! More often than not, there are discounts and negotiations available with brokers. Some of them offer discounts when there is a certain trading volume that one has narrowed down to.
    Call your shortlisted commodity brokers in India and discuss these discounts and negotiations with them one on one. Since nobody wants to lose a potential customer, you might be able to find the best broker within your budget fit through this process!

These 5 points are the basic check-list for any commodity trader to look out for. While market ups and downs will determine your profit the most, other than it, your broker’s efficiency will be a determinant too!

We all want a smooth sailing boat, and to ensure that, speak to your broker and establish a good rapport with him.

Once all of this is done, you are free to explore the vast world of commodity trading!

Also Read: Tricks And Tips For Commodity Trading

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