Equity and Commodities Trading In India
Every big company needs to raise money to build or expand their capital and finance their operations. They come to the general public for this money. They sell the stock shares in their company to people who purchase these shares, thereby investing in the company. These shares have inherent value and are tradable commodities and people are free to sell or purchase them on the share market or the stock market. The whole buying and selling of shares is called trading which happens on the stock exchange.
The Indian stock exchange
The place where shares and derivatives are traded, that is, where the stocks of corporations are bought and sold; is known as the stock market or the stock exchange. Equity trading in India happens on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). The NSE is situated in Mumbai and mainly trades in derivatives. The BSE in Mumbai is the oldest stock exchange in Asia. Between the NSE and the BSE all the big and small stock of almost all the listed companies in India are traded. The timings and the processes of trading are the same for both NSE and the BSE.
Trading happens two-fold. One is equity trading and the other is commodities trading in India. Equity trading is when a company’s stock shares are bought and sold. The shares of larger multinational corporations are bought and sold on major stock exchanges of different countries; while those of smaller public corporations are traded in over-the-counter (OTC) markets. Equity trading in India takes place through the BSE and the NSE.
‘Commodities trading in India’ is done on Multi Commodity Exchange (MCX) of India Ltd., National Multi Commodity Exchange and National Commodity and Derivatives Exchange Ltd.Commodity trading is buying and selling physical substances such as food grains, metals and such in the global market to take advantage of the changes in the prices for these commodities globally. Commodity trading occurs on major stock exchanges across the world through contracts that are standardized and predetermined. Sometimes, these commodities are essential goods that have a common price across countries, such as gold. Other times, these commodities could be raw products that can be used to produce further goods and services.The most commonly traded commodities are metals like copper, silver, gold; energy products like gas and oil; and agricultural products such as sugar, corn, coffee, cotton, etc. The supply and demand for these products determines the prices.
by Chris Devers