Commodities trade via home

Futures trading in commodities is literally at your fingertips now.

Motilal Oswal Commodities Broking (MOCB) has launched country's first web-based trading to facilitate the clients to trade on their own from the comfort of their office or home.

Futures are the standard way of investing in commodities. And physical delivery of the actual commodities can also then be demanded and taken, though usually this is not done "" it would be prohibitive to store 5 tonne of sugar or coffee in one's home! But one can trade in a variety of commodities in a continuous fashion, without taking delivery. All this can be done from any place through the Internet.

The biggest advantage of e-trading is that the investor can see streaming quotes enabling to see the latest market movement, drive benefits of self execution & instant confirmation, access accounts and related information on the web and be directly served for all advisory services.

To participate in the web based trading through MOCB, an investor has to open an account with the company, and enter into an agreement by executing the member-constituent agreement, submit the registration application form and maintain a deposit of Rs 30,000 upfront.

Clients also have to maintain a margin account with MOCB. For example, suppose a client wants to trade in one lot of gold (each lot is of 100 gm, valued at Rs 60,000) on the NCDEX. This means he will have to deposit margin money of about Rs 12,000 or 20 per cent of the value of the lot. It is imperative for the clients to read all paperwork including the disclosure forms and fill out the forms as accurately as possible.

If one is an existing client, MOCB allows him to seek the addition of commodities trading facility under his stock or equity derivatives account. New clients will have to open a bank account and also a depository participant account.

Due to the volatility and uncertainty in the market, the activity limit of each client is fixed on the basis of his margin deposit, the balance in the ledger account and the shares lying in his DP with us.

To view the trading limits the client can go to the Trading Limits option in the drop down Options menu. Here the limits can be seen. To start off, you will be given a default login password and transaction password. Once you login you can change your password by going to the Set up option on the trading engine. For more information one can email to info@motilaloswal.com.

LOOK BEFORE YOU LEAP: Commodities present an exciting alternative investment and trading tool, but it is important to be well-prepared to enter the markets. Futures prices are not price predictions, but are the collective current opinion of the marketplace of where prices appear to be heading.

That opinion, and the direction of prices, can change in an instant, which makes trading these markets so challenging and potentially rewarding. It can hurt badly too.