Multi-Commodity Exchange, is the largest platform in India to trade in precious metals, industrial metals, oil and several agricultural and non-agricultural commodity items which includes Gold, Silver, Copper, Aluminium, Zinc, Lead, Crude, Almond, etc.
The daily turnover of MCX is nearly 1,00,000 CRORES which is definitely remarkable on everything that deals with currency and metals.
MCX also supports trading in currencies such as USD V/S INR.
When it comes to COMEX, there are tonnes of tutorials available for the calculation part and more over several softwares offer such functions to know HOW MUCH PROFIT / LOSS YOU COULD HAVE MADE due to the difference in points.
Such a technique, helps youngsters or interested aspirants in learning the mathematics behind the PROFITS and LOSSES in the commodity business.
You must be knowing that I am a Science stream student and for science stream students, the commercial math seems weird. As a matter of fact, it is pretty simple to understand the mathematics behind the money game.
The standard margin used in India is 5% to 10% i.e. the leverage is 1:10 to 1:20. You can trade as many as 10-20 times the capital you have, this depends on the brokerage firms. Please note that, due to high volatility observed in the commodity market recently, MCX has higher margin levels, which has been increased by nearly 50%. So may be (with some brokerages) the leverage they may offer now is 1:5.
You must understand that, having margin money, gives you the access to buy a FUTURE contract of the commodity which expires at the end of month. You can roll it over to the next month as well.
The things that you should know are as follows:-
- Face Value of a commodity- is the price of a unit commodity (depending upon the commodity itself). For instance, when we say 26,000 Rs -Gold means 26,000 Rs. for 10 grams of gold . And when we say 55,000 Rs. for Silver, it is for 1 kilogram(=1000 grams) of silver. Similarly other commodities have their own quantity and lots to trade in. And these need high margin.
- Quantity- The quantity of commodity that you trade in. In MCX, there are specific definite lot sizes , which have to be bought in their real whole number multiples.
- Difference is the difference of point at which you enter in a commodity & the point at which you exit from a commodity.
The Simple math behind profit and loss of commodity items is:-
For buying position,
(BUYING PRICE – SELLING PRICE)*LOT SIZE * NO. OF LOTS = PROFIT / LOSS
For short position,
(SELLING PRICE – BUYING PRICE)*LOT SIZE * NO. OF LOTS = PROFIT / LOSS
To clear out the doubts and confusion in the minds of people who wish to trade in the commodity market, Techite Solution is about to introduce you to it’s latest software product called “MCX Trainer”, which will help MCX aspirants to know the math behind every trade in commodity market and turn a novice beginner into a person with standard knowledge of the commodities.
MCX Trainer will be available in two versions, one of them will be WINDOWS VERSION and the other one will be MOBILE / WEB VERSION.
It features Quick Walk through – a guide to the basics of trading in stocks and commodities including things such as resistance, support level and various standard terms of the market.
Live Rates will pop up the user with a distinct page which will showcase the live rates of various commodity items across the globe.
Latest Tips will include tips that can be followed upon to make surplus profits.
Latest Updates / News will point you to the latest financial headlines on the go.
Technical Resistance / Support Calculator will make it easy for you to know when the market can crash technically and when can it be up by leaps and bounds.
Margin Guidelines will contain the standard margin requirements by MCX and it will also contain list of popular brokerage houses along with their margin schemes.
The main feature of MCX Trainer is Future Profit / Loss calculator, in which, you’ll be presented with a form to select the commodity, enter it’s entering and exiting value, and the number of contracts. Bingo, you have the PROFIT / LOSS calculated easily.
This software has been developed by Techite Solutions along with technical database at astrodunia.com.
This software is currently under moderation and will soon be uploaded for FREE.
If you want to preview this software before release, don’t forget to send an e-mail to admin@techite.com.
We welcome all constructive criticism, tips and suggestions.
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