The stock market isn’t the only financial market where you can invest and expect returns. In fact, the commodity market is another great option that you can consider investing in.
Unlike the stock market, you trade in derivative contracts, such as futures and options, of agricultural and non-agricultural commodities in the commodity market. By investing in commodities, you not only get to tap into the market, but can also bring about some much-needed diversification for your portfolio.
Now, before you invest in such a market, you would first need to open a commodity trading account with a commodity broker. But then, how do you choose the best commodity broker? If you’re in such a dilemma, then this article can help you out. Here are some things that you should keep in mind when choosing a commodity broker.
1. Trading platform and user interface
The first thing that you need to take into consideration when choosing a commodity broker is the entity’s trading platform. Some of the best commodity brokers like Motilal Oswal have a comprehensive trading platform that can be accessed using a web browser or a smartphone application.
Also, the user interface of the trading platform must be simple to understand, friendly, and easy to use. This drastically reduces the learning curve and allows you to get the hang of the platform much faster.
2. Brokerage
This is probably the most important factor to keep in mind when choosing a commodity broker. Every broker levies a fee called the brokerage for every successful trade placed through their platform. And the amount of brokerage charged on a trade can vary depending on the broker you choose.
Some of them tend to charge a percentage of the total trade value as brokerage, while others charge a flat-rate fee on every trade irrespective of its value. The lower the brokerage, the better since it brings down the overall cost of your investment.
3. Customer support
Another major aspect of a commodity broker that you need to look into is the customer support. Some of the best commodity brokers tend to have good customer support which you can rely on in the case of any trading mistakes or mishaps. So, it is important to choose a broker who has multiple communication channels and provides good customer support at a relatively short notice.
4. Robustness of the platform
Even a short downtime can cause you to miss a golden trading opportunity. So, the trading platform of the commodity broker must be robust and have little to no downtimes. If you’re not sure of how robust the trading platform of a broker is, you can resort to checking user reviews of other traders. This will allow you to get a good idea of how frequent or how long the downtimes are, if any, and what steps the platform has taken to ensure that it doesn’t happen again.
Conclusion
In addition to the four points mentioned above, you should also take a look at the commodity broker’s overall industry experience. Although there are many new-age brokers, the longer a commodity broker has been in business, the better.
If you wish to open a commodity trading account with a simple user interface, no downtimes, low brokerages, and good customer support, then head on over to the website of Motilal Oswal today. You can open your very own commodity account within just a few minutes through a completely paperless process.
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