Build your professional network on facebook via our app Go to app
 
 
Posted in Community :

Sultans of NSE

 
Started by : Sukumar Maity, Sr. Associate, IDBI Bank   12 04 2008 10:04:32 +0000
Industry : Equity Research/AnalyticsFunctional Area : Strategy Execution(Strategy & Execution)
Activity:  24 views;  last activity : 07 06 2010 20:18:09 +0000

 The Commodity market it is an exciting asset class providing opportunities for investors to diversify their investments and the portfolio assuch. Many investors are very reluctant to trade commodities due to a variety of misconceptions by the general public, because these misconceptions were created by frustrated, losing commodity traders or by those who view commodities as too difficult of an investment to understand. So what are the misconceptions in the Comodity trading???  Do share your views on this......

 
Share
 
 
  Rate : 
 
 
 
 
  1 0 0
 
 
 
 
 
 
 
 
 
1 2 3
1 Too much expectation & too little knowledge
2 Too much volatility
3 Not enough money

Too much expectation & too little knowledge

idea posted by Sanjay Arora CEO/MD/Director, Videh International Pvt. Ltd.

Biggest problem is too much expectation, most of which is due to lack of knowledge & hype/wrong promises by broker marketing teams with quotas to meet.

There are always going to be trades in which the investor is going to lose, nobody is willing to tell the investor that. Proper Risk & Money management is required and very few people even know of this as an issue. Leverage is a twin edged sword and when used, it should be spread among multiple small bets, across a well diversified portfolio.

 

1
0
  
by Hitesh Moghe, Associate, Barclays  | 05 12 2009 06:30:22 +0000

Yes Sanjay i totally agree with you....as people expect too much and will be knowing very less about what they are doing...and the other thing like the leverage thing you've put up is true....should be done with diversed portfolio....thanks for the idea sanjay...

Add your argument:

Too much volatility

idea posted by Sukumar Maity Sr. Associate, IDBI Bank
Many investors consider volatility as the biggest problem when investing in commodities. Normally, one has to put up about 6-10% of the total value of a commodity futures contract in margin which is far less than the required amount of margin for stock futures. Also, many new commodity traders don’t know the way to handle the new-found gift of incredible leverage. In general, commodities are not volatile than stocks as an asset class if we remove the leverage factor.
0
No supporting Arguments for this idea
Add your argument:

Not enough money

idea posted by Subhrangshu Das Sr. Associate,bulls Research
This is one such misconception that is there in the commodity trading, The problem with commodity trading is that investors take on too much risk for their account size. They want to hit a six at a single given chance and by doing this they bet it all on single trade, and by doing this they will fall  into the trap. If you are looking for a decent return of 25 percent a year, you will do much better in the longer run as opposed to trying to hit a sixer. So there is enough money if you play a waiting game.....

0
No supporting Arguments for this idea
Add your argument:

Add your Idea
Idea* : 
Add your argument:
edit in rich text ...
Could not find any idea interesting in: "What are the misconceptions in commodity trading??" ? Click here to add a new idea...

Found the idea contest "What are the misconceptions in commodity trading??"  interesting ?  Click here to refer to your connections and communities
Bangalore's leading recruitment firm
  • Create a confidential Career Profile and Resume/C.V. online
  • Get advice for planning their career and for marketing of experience and skills
  • Maximize awareness of and access to the best career opportunities
Viewers also viewed
Equity Market vs Commodity Market
 
159 referals 9 arguments, 370 views
Commodity derivative markets have traditionally been a contentious issue at various policy...
 
938 referals 2 votes, 391 views
Recently, the finance ministry of India said that it is possible for India to move into...
 
594 referals 28 arguments, 595 views
more...  
Recent Knowledge (10)
A Pakistani lawmaker has said that terrorist outfits in Khyber-Pakhtunkhwa province are...
 
1281 referals 13 votes, 207 views
To get growth one decides of studying further. Some people might be willing to do it after...
 
1797 referals 4 votes, 101 views
 
0 referals 3 votes, 57 views
more...  
More From Author
Many of them go for Mutual funds but most of them don't know that their fund managers role is important here and if performs bad the outcomings wil not be that good,,,and the points which you've mentioned are apt in this regard...
There various others also which gives a security benefir and even tax redemption. They are not fit for short term borrowings.
Stock market has seen a lot of fluctuation in the market. Stocks are moving frequently. Is this the correct time to buy stocks?
more...