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 | I am a Farmer - How do I participate in commodity derivatives market? | |
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| A farmer can join Farmer Producers Organisation (profit institutions which are collectively owned by primary producers or farmers). FPO then needs to open Trading and Repository account with Exchange/s and Repository Participants respectively. After opening of trading account, the FPO can participate in commodity derivatives trading. | |
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| How do I know about the requirements to participate in Commodity Market? | |
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| Trading in commodity derivatives can be undertaken only through a SEBI registered stock broker. For this purpose, following steps may be undertaken to start trading: ➢ Choosing a Broker-Opening Trading Account with a SEBI registered stock broker and completing the process of Know Your Client (KYC) ➢ To understand the contents of Risk Disclosure Document (RDD) ➢ Allotment of Unique Client Code (UCC) by the Stock Broker ➢ Depositing of required Margin with the Broker ➢ Opening a Bank account for funds transfer/receipt ➢ Deposit required Margin only through bank and obtain receipt for the same 6 ➢ Open account with Repository to facilitate delivery | |
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| How do I know about the money required to initiate a trade in commodity market? | |
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| One needs to deposit a minimum amount called as initial margin. Initial margin is the minimum margin required to initiate a trade in the commodity derivatives market. It is a percentage of the value of the commodity contract lot, and is notified in advance in the contract specifications of a futures contract. Exchanges prescribes the amount from time to time. | |
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