News & Commentary
1. How to contact for help related to online trading?
At JK Comtrade, we are always happy to help our customers. You can contact our
We are Available from 08:00 a.m. to 11.55 p.m. from Monday to Friday & Saturday from 10:00 a.m. to 2:00 p.m.
2. Do I get any confirmation after trading is done?
You get instant trade confirmation on your trading portal. Apart from this, a soft copy of Contract note will be sent to your registered mail id & hard copy of contract note is dispatched to your address (registered with us). You will also receive an SMS of your net obligation, at the end of trading day, if you have provided us your mobile number.
You can also check your online back office, round the clock, to track trading done by you.
3. What is Margin/Intraday trading?
In Margin trading / intraday trading, if you place a buy order then you will have to place a sell order or vice versa same day i.e. in same settlement cycle. You are required to close all your intraday positions prior to 20 minutes of market closure. JK Comtrade may square off, whenever it is applicable, 20 minutes prior to normal market closing.
You can also convert margin orders to delivery if you have sufficient buying power available in your trading account.
4. What is a forward contract?
Forward contracts are an agreement between a buyer and a seller; the seller delivers a quantity of a commodity at a future date for a price agreed upon at the time of the contract.
5. What is a commodity?
A valuable quality.
Something that is beneficial.
A commercial advantage.
Something intended to be sold at a profit.
A physical substance.
Raw materials purchased by manufacturers to make other products.
A good or service that can be readily exchanged or exploited within a market.
There is also an archaic meaning: a quantity or lot of goods.
6. What is a commodity market?
Commodity markets are markets where raw or primary products are exchanged. These raw commodities are traded on regulated commodities exchanges, in which they are bought and sold in standardized contracts.
7. What is Initial Margin?
Initial margin is the equity required to initiate a futures position. This is a type of performance bond. The maximum exposure is not limited to the amount of the initial margin, however the initial margin requirement is calculated based on the maximum estimated change in contract value within a trading day. Initial margin is set by the exchange.
8. What Does Commodities Exchange Mean?
An entity, usually an incorporated non-profit association that determines and enforces rules and procedures for the trading of commodities and related investments, such as commodity futures. Commodities exchange also refers to the physical center where trading takes place.
Two major national level commodities exchanges are Multi Commodities Exchange of India (MCX), National Commodities and Derivatives Exchange of India (NCDEX).
9. Trade Timings
Trading on exchange platform takes place on all days of the week (except Sundays and holidays declared by the Exchange) Market timings are as follows:
10:00 a.m. to 05:00 p.m. (Monday to Friday)
5:00 p.m. to 5:15 p.m.
10:00 a.m. to 2:00 p.m. (Saturday)
2:00 p.m. to 2:15 p.m.)
10:00 a.m. to 11.30* p.m. (Monday to Friday)
11:30 p.m. to 11:45* p.m.
10:00 a.m. to 2:00 p.m. (Saturday)
2:00 p.m. to 2:15 p.m.
* Timings are based on Daylight Savings Calendar published by US Government. The Exchange may change the above timing with due notice.
10. What are the tradable commodities?
Gold and Silver
Pepper, Red Chilli, Jeera, Turmeric, Cardamom
Steel Long, Steel Flat, Copper, Nickel, Tin, Steel, Aluminium Zinc ingots
Kapas, Long Staple Cotton, Medium Staple Cotton
Crude Oil, Natural Gas, Brent Crude
11. Net position
Net position is the difference between total open long (receivable) and open short (payable) positions in a given assets (security, foreign exchange currency, commodity, etc...).
12. What Does Long (or Long Position) Mean?
The buying of a security such as a stock, commodity or currency, with the expectation that the asset will rise in value.
In the context of options, the buying of an options contract
13. What Does Short (or Short Position) Mean?
The sale of a borrowed security, commodity or currency with the expectation that the asset will fall in value.
In the context of options, it is the sale (also known as "writing") of an options contract.
14. Who is the regulator?
The exchanges are regulated by the Forward Markets Commission. Unlike the equity markets, brokers don't need to register themselves with the regulator.
The FMC deals with exchange administration and will seek to inspect the books of brokers only if foul practices are suspected or if the exchanges themselves fail to take action. In a sense, therefore, the commodity exchanges are more self-regulating than stock exchanges. But this could change if retail participation in commodities grows substantially.
15. Do I have to pay sales tax on all trades? Is registration mandatory?
No. If the trade is squared off no sales tax is applicable. The sales tax is applicable only in case of trade resulting into delivery. Normally it is the seller's responsibility to collect and pay sales tax.
The sales tax is applicable at the place of delivery. Those who are willing to opt for physical delivery need to have sales tax registration number.
16. What is a "Commodity Exchange"?
Like stock exchanges in capital markets, a commodity exchange is an association or a company or any other body corporate that is organizing futures trading in commodities. The new generation national level exchanges have been set up in a corporatized / demutualized environment. There are 3 nationally recognized commodity exchanges in India and 22 regional exchanges. The national exchanges are Multi Commodities Exchange of India (MCX) in Mumbai, National Commodities and Derivatives Exchange of India and National Multi Commodities Exchange.
17. What is the meaning of "Futures Contract"?
Futures contract is an agreement between two parties to buy or sell a specified quantity and defined quality of a commodity at a certain time in future at a price agreed upon at the time of entering into the contract. This is typically traded at regulated commodity exchanges.
18. What is the difference between spot market and futures market?
In a spot market commodities are physically bought or sold usually on a negotiable basis resulting in delivery. While in the futures markets, commodities can be bought or sold irrespective of the physical possession of underlying commodity. The futures market trades in standardized contractual agreements of the underlying asset with specific quality, quantity and mode of delivery whose settlement is guaranteed by regulated commodity exchanges.
19. What is meant by Hedging?
Hedging means taking a position in the futures or option market that is opposite to a position in the physical market. It reduces or limits risks associated with unpredictable changes in price.. The objective behind this mechanism is to offset a loss in one market with a gain in another.
20. What is the benefit of futures trading in commodities?
The biggest advantage of trading in commodity futures is price risk management and price discovery. Farmers can protect themselves against undesirable price movements and decide upon cropping pattern. The merchandisers avoid price risk. Processors keep control on raw material cost and decreasing inventory values. International traders also can lock in their prices.
21. What is the statutory framework for regulating commodity exchanges?
The commodity exchanges are regulated by Government of India under the Forward Contracts (Regulation) Act, 1952. The regulator is the Forward Markets Commission (FMC) situated at Mumbai, functioning under the Ministry of Consumer Affairs, Food & Public Distribution of the Central Government.
22. What new developments are expected in this market?
The large-scale institutional participation by banks, mutual funds and FII subject to the much-awaited clearance from the authorities. Increased retail participation and introduction of option trading is also expected to take place in this market.
23. What do you understand by margin money with respect to commodity futures?
It is the security deposit given by the trading members to the exchange in order to deal in different contracts listed over there. The clients deposit this money with the members who in turn transfer it to the respective exchanges.
24. What is the purpose of collecting margins?
The purpose of collecting margin money by the exchange is to avoid the counter party risk of defaulting by its members or their clients in fulfilling their obligations. It is part of the risk management system as prescribed by the market regulator, Forward Markets Commission (FMC).
25. What do you mean by delivery period margin?
It is the extra margin imposed by the exchange on the contracts when it enters the concluding phase (starts with tender period and goes up to delivery / settlement). This amount is applicable on both the outstanding buy and sell positions.
26. What is Mark-to-Market (MTM)?
At the end of every trading day, the margin account of the trader / client is adjusted to reflect the participant’s gain or loss. The price changes on the close of every trading day may result in some gain or loss as compared to the previous day’s closing price. These price variations are netted into the daily margin account. This process is known as marking to the market.
27. What happens if an open position of a futures contract is not squared off
(Closed out ) before the expiration date?
If an open position of a future contract is not closed out, on or before the expiration date, depending on the long / short position, the trader will have to take / give delivery of the underlying commodity respectively. It will be effected as per the settlement mode mentioned in the contract
28. What do you understand by the term “tender period”?
(Closed out ) before the expiration date?
The contract enters into the tender period a few days before the expiry. This enables the members to express their intention whether to give or take delivery.
29. What is due date rate?
It is the rate at which the contract is settled on the expiry date. Usually it is the average of the spot prices of the last few trading days (as specified by the exchange) before the contract maturity.
30. What happens if there is a default in delivery at the end of the contract period?
In case of default, penalty will be charged at the specified percentage of the due date rate as per the contract specifications.
31. What is spread trading?
Spread trading allows a member to execute two trades simultaneously in two different maturity contracts of the same commodity, by a single order. By trading in the spread contracts, a member takes two opposite positions, one in near month contract and the other in the far month contract. Usually, it is less risky than outright position.
32. What is the meaning of stop loss order?
Stop loss orders are placed to restrict losses, which may be incurred due to adverse movement of commodity futures prices. These orders are kept by the system in suspended or abeyance mode and are activated only on the trigger of a price, as defined in the order. It can enable closing out of existing positions.
33. What is the difference between day order and good-till-date order?
Day orders are available for execution during the trading day. All day orders, if not executed will get cancelled at the end of the trading day on which such orders were submitted. However, Good till date order is available for execution till the end of the date indicated in the order or till the last trading day of that contract, whichever is earlier.
34. What is a good-till-cancelled order?
Good-till-cancelled order lasts till the order is executed or cancelled, regardless of how many days or weeks it takes. Investors often use GTC orders to set a limit price that is far away from the current market price. A GTC order is available for execution till the maturity of the contract, or till it is cancelled, whichever is earlier.
35. What is the expiry date of the commodity futures contract?
It is nothing but the last day of the existence of the contract when the settlement price is to be decided as per the contract specifications.
36. What happens if the expiry date is a holiday?
If the expiry date is a holiday, then the contract would expire on the immediate previous working day. If the preceding day is suddenly declared a holiday, then the contract shall expire on the succeeding working day.
37. What is base price of a commodity futures contract?
When a contract is launched, the exchange decides its base price. It is the notional spot market price for the previous day of the contract launch, which includes a notional carrying cost. For all other days, base price is taken as the official closing price of the previous trading session.
38. What is the price limit circuit filter or the Daily Price Range (DPR)?
The exchange notifies a daily circuit filter for individual commodities with respect to the percentage variation allowed in a normal trading session. In other words, the circuit filter provides the maximum range within which a contract can be traded in a particular session.
39. What is the special margin?
“Special margin” is the additional margin imposed by the exchange to curb excess volatility in the market. Again, this varies from commodity to commodity.
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