Understanding Commodities - Part 3

Why invest in commodities?
The short answer is that, based on historical data, adding commodities exposure will increase your returns while lowering your risk. Investing in commodities is much safer than equities because there is no inside trader.

Who should invest in commodities?
Investors
Producer/ Farmers
Importer/ Exporters
Hedgers, Specualtor, Arbitrageurs

Do physical deliveries happen in commodity futures exchanges?
The exchanges, in order to maintain the futures prices in line with the spot market, have made available provisions of settlement of contracts by physical delivery. They also make sure that the futures and spot prices coincide during the settlement so that the fair price discovery mechanism is in place.

Do I need a separate Trading & Demat account for commodities trading?
Yes. You need to open a separate trading and demat account for trading in commodities. If you want to trade in NSEL you have to have a separate trading and demat account but if want to trade in
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