FAQ Get started with trading

Get started with trading

You need to know three basic terms before starting to trade in commodities:

  • Going Long : Buying a commodity in anticipation of its price moving up
  • Going Short : Selling a commodity in anticipation of its price coming down
  • Stop Loss Order : It is an order to square off a trade if the underlying commodity’s price crosses a pre-specified threshold, known as Trigger Price. A Stop Loss order is used to limit trading losses. The system keeps the order hidden till the price of the commodity reaches/crosses the trigger price.

Yes. Anybody who is a resident of India can open a commodity trading account with Kotak Commodities. The commodity trading account holder may be an individual, a Hindu undivided family (HUF), a proprietary firm, a partnership firm or a company.

The easiest way is to apply for an account online. Just fill up the form on the Kotak Commodities homepage. Give your name, Email ID, Mobile number and City of residence. Our Relationship Manager will then get in touch with you and guide you on how to open commodity trading account.

Alternatively, you can call us or visit a Kotak Commodities branch near you to open an account. You would need to submit a few documents for opening this account.

The documentary requirement for opening a trading account varies by customer type. Here is the documentary requirement for each customer type:

Documents

Salaried Employees

Self Employed

Partnership Firms

Corporates

Photograph

Yes

Yes

Yes

Yes

Proof of Address

Yes

Yes

Yes

Yes

Proof of Identity

Yes

Yes

Yes

Yes

Partnership Deed

-

-

Yes

-

Letter of Authority

-

-

Yes

-

Memorandum & Articles of Association

-

-

-

Yes

Board Resolution

-

-

-

Yes

Signature Verification

Yes

Yes

Yes

Yes

A copy of any of the following documents can be provided as proof:

Proof of Address

Passport, Driving License, Ration Card, Voter's Identity card, Telephone bill, and Electricity bill, Bank Passbook/Bank Statement or Rent Agreement

Proof of Identity

Passport, PAN Card, Voter's Identity Card, Driving License

Proof of Signature

Passport, PAN Card, Driving License

  1. In case of Partnership firm, photograph of partners is required and in case of corporate photograph of authorized signatory is required.
  2. Submission of PAN card is not necessary. If PAN card is not available, please fill the declaration in the account opening form.

Can you call someone without a phone? No. Exactly, the same way, you cannot deal in the Commodities market without a trading account. It’s an absolute must.

Yes, you will need a Demat account. However, this one would be separate from your Equity Demat account. You need to open a Commodity Demat account from the National Securities Depository Ltd to trade on the NCDEX.

Your account will be opened within two weeks after we receive your completed application form and supporting documents.

You will receive a welcome kit containing the following:

  1. A welcome letter containing details of your account with us.
  2. A Personal Identification Number - a unique numeric code for one-time use for account activation.
  3. An Easy Steps To Start Investing manual.
  4. A User Manual in the form of booklet and CD which is a detailed guide on how to activate your account and start trading.

You will also receive the initial password on your email id registered with us.

Yes, you can. These are called After Market Orders. This facility is available to all online trading customers of Kotak Commodities.

AMO or After Market Order is a facility offered by Kotakcommodities.com, whereby, customers can place their orders after close of trade for a day.

You can place an AMO from your Kotak Commodities trading account from 11.30 pm to 6.30 am and 8.30 am to 10.00 am on all working days.

AMO has the following advantages:

a) You don’t miss out on profitable trading opportunities, even if you are unable to trade during market hours. You can place an AMO before the market opens. It will be executed when the market opens the next day.

b) You can use the off-market hours to study the day’s market fluctuations, closing price, Kotak Commodity’s commodity recommendations etc. You can then place an AMO based on these. Your order will be executed when the market opens the next day.

Imagine if you placed an order and had to monitor every second during choppy markets. That’s too taxing. Instead, you can determine the maximum loss you are willing to take. Then, you can give the system the advise to close your order if it crosses this loss threshold. That’s what a Stop Loss order does.

A Stop Loss order squares off a trade if the price crosses your pre-specified threshold, i.e. the Trigger Price. This order is, thus, used to limit trading losses. The system keeps the order hidden till the price of the commodity reaches/crosses the trigger price.

Order Type

Trigger Price Range

Buy Order

Market Price < Trigger price < or = Order Price

Sell Order

Market Price > Trigger price > or = Order Price

A Stop Loss order is forwarded to the exchange when the market price hits the trigger price. The order gets traded at a price between the Trigger Price and the Order Price.

You need not monitor the market closely every minute or hour. Or for that matter even on a daily basis. You can set alerts with Kotak Commodities to inform you of major developments. We can then send an SMS to alert you. You can even customise this to suit your trades and other needs. Any Kotak Commodities customer who wants to receive commodities market updates on their mobile phone can avail this service.

Call & Trade is a trading service that Kotak Commodities offers its customers. Customers can use this service to trade in commodities over the phone by calling on Kotak Commodities’ Call & Trade number – 1800 102 6776.

The Call & Trade facility is available only to Kotak commodities’ online commodity trading customers.

Here’s what you can and cannot do:

Can do

Can’t do

Get live market rates for all commodities

Inquire regarding registration/limits/position

Place a Trade in all commodities available for trading

Periodic queries regarding trading Pay in/Pay out

Place more than one order

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Please note that by submitting the above mentioned details, you are authorising us / Kotak Commodity Services Private Ltd (formerly known as Kotak Commodity Services ltd) to call you and send promotional communication even though you may be registered under DNC.

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