Commodity trading isn’t riskier than investing in stocks, but since it takes more experience to trade in commodities, new investors might find it difficult to understand at the beginning.
Conceptually, options on commodities are the same as options of stocks, indices and currencies. Based on exercise options can primarily be of two types. In the American type, the buyer can choose to exercise the option at any time before the expiry of the option contract. While in the European type, the buyer can choose to exercise the option only the date of expiration of the contract.
In the special segment ‘Commodities Trade’, CNBC-TV18’s Manisha Gupta gets all the details on commodity options trading.
Watch the video for an in-depth analysis
To watch other videos in this series, click on the Commodities Trade tab below.