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Commodity Trading Desk | Commodity Desk Setup for Traders in India | Contact Us Today !
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The Stock market offers many assets to trade, and Commodity is among them. Learn what is commodity trading desk, how to get a commodity trading jobs and make a career in the most secure financial asset
What is Commodity Trading Desk in Stock Market ?
A trading desk could be a physical place or any department in a financial institution where different types of securities are traded, such as shares, commodities, currencies, etc. There are dedicated and experienced traders in specific departments responsible for a single asset.
Where commodities such as agricultural products, crude oil, gold, etc., are traded is known as a commodity trading desk. Commodities trading is further categorized into two main divisions; hard and soft commodities. Trader may choose whichever Commodity he wants to trade in. In addition, traders can do commodity trading via futures and spot trading.
Types of Commodities Traded in Commodity Market
You can differentiate between soft and hard commodities based on their shelf life. Hard commodities include the products like gold, silver, crude oil, etc. Soft commodities include agricultural products like cocoa, soybean, rice, wheat, and corn. The hard ones stay safe for longer, while the soft ones have a shorter life span. Some banks and institutes have a single desk for commodities trading where every type of Commodity is dealt. While in some banks, if the number of transactions in one Commodity is higher, they may have a separate commodity trading desk. For example, Crude oil or wheat
As discussed, commodity traders can execute trading in different ways: futures and spot trading. The trading in which the payment (full or partial) is made and delivery is scheduled for a future date is said to be future commodity trading. When the payment and the delivery are made at the same time, it can be considered spot trading.
Commodity desk trading is done on behalf of the hedgers or speculators to minimize the risk and avoid financial losses. For example, an airline company might want to hedge the capital in oil for its later usage; in the same way, a farmer might enter into a futures contract to hedge the corn which is yet to deliver after a few months.
Exchange Board for Commodity Trading Desk in India
In order to participate in the commodity market, you must be aware of the commodities exchange board. It is a regulatory board where the transactions related to commodities take place where you can do trading with help of commodity trading desk.
The National Commodity Exchanges in India are:
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Multi Commodity Exchange of India (MCX)
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National Commodity and Derivative Exchange (NCDEX)
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Indian Commodity Exchange (ICEX)
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National Stock Exchange (NSE)
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Bombay Stock Exchange (BSE)
How can I Start Working for Commodity Trading Jobs ?
To start your career in commodity markets and to do commodity trading desk jobs, you need to have a bachelor's degree in economics or finance. The primary job role of the commodity trading jobs is to assist traders in negotiations and making arrangements for either selling or buying various commodities. Spot trading in commodity trading is relatively easy to learn. Anyone with an internship of a few months can learn spot commodity desk trading, but the only tricky part is learning the various strategies for futures trading. It might take a good amount of time to master the futures trading skills, but they are worth learning and investing time. If you want to know the basic structure or an outline to get the commodity trading jobs, this is what you need to do:
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Get a bachelor's degree and other relevant education.
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Start your internship with the commodity trading company.
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Apply for the license of commodity trading desk by giving a simple exam.
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Acquire practical experience and keep learning to master commodity trading using various tools and software available for the commodity desk.
So, this was about the introduction to commodity trading desk and how to get a commodity desk jobs. If you are also interested in learning commodity trading, call us now.
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