Trading within Primary Economic Sector

A commodity trading is a market that trades in primary economic sector rather than

manufactured products. Flexible commodities are farming products such as wheat, coffee,

cocoa and sugar. Hard commodities are mined, such as gold, oil and base metals.

Base metals are widely used in commercial and industrial applications. They are more

abundant in nature and therefore far cheaper than expensive metal such as gold, silver and

platinum. Base metals embrace aluminum, copper, lead, nickel, tin and zinc. These materials

are economical and more commonly found than dignified metals such as gold and platinum.

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Base metals are precious to the global economy because of their utility and existence. Copper is

called the metal with a Ph.D. in economics because its extensive use makes its price very

sensitive to global economic trends. It is a leading base metal. Skilled experts appointed by

advisory firms can consult base metal trading tips.

Trading in these economic sector falls under commodity trading. Stock trading has both the

spot market as well as the derivatives market, whereas the commodity exchange has only the

derivatives market. In a spot market, an investor can buy shares and hold it continuously. You

can sell it whenever you decide to.

Traders can hold the shares for long term – say 2 years or 10 years. In the derivatives market,

investors will do advance booking to buy or sell a particular quantity of shares or commodities

or currencies on a pre-determined settlement date for a pre-fixed price.

As traders are doing only advance booking they need not pay the complete price, just need to

pay the margin money.

Multi Commodity Exchange of India Ltd (MCX) is an independent commodity exchange based

in India. Many advisory firms offer free MCX tips. It is recommended to pursue MCX tips

before indulging into commodity exchange.