Commodities are completely a different asset class when it comes to trading and investing. Retail investors don’t usually invest in commodities like Natural Gas, Gold, Silver, etc. Therefore commodities are used for intraday or positional trading.

Let’s look at how to buy commodities in Zerodha.

Before we find out how to buy commodities in Zerodha, let us look at some important points to consider:

How to buy commodities in Zerodha? Important Points

Some Important Points to consider:

1. The commodities segment in your Zerodha account must be active. This can be done at the time of account opening or could be done afterwards by submitting some necessary documents. They include documents like Income proof, ITR, Salary Slip, etc. The charges for activating the commodities section is Rs. 100 that has to be paid separately at the time of activating the segment.

2. Once the commodities segment is active in your account you need to add funds in you commodity section of your account. Zerodha has two separate segments to add funds. One is the Equity and Derivatives, through which you can place an order in the Cash and Derivatives market. The second segment is for the commodities where you have to add funds to trade in commodities.

Once you have completed these two steps successfully, you can buy any commodity on Zerodha by following these steps.

Steps to buy Commodities:

1. Open your Zerodha account by entering your Login details, ID, and Password. Post that, go to the watch list and enter the commodity that you want to buy.

2. Let us assume you want to buy Gold, you can choose, Futures or Options of Gold. If you want to buy Gold Futures, enter the Gold FUT symbol in the search bar and add it to your wish list

3. Click on the “Buy” button on Gold in the watchlist. A order box will open. Select the order type, (MIS or NRML). Choose MIS if you want to square off the position within the same day, or else choose NRML for an overnight position.

After this, enter the price at which you want to order to get executed in the Limit order section. If you want to buy it at the current price then select market order.

4. After confirming all the order types, enter the quantity you want to buy, for example, 1, 2.. etc. After this, the order will get confirmed and in case of a market order, it will get executed immediately. Make sure to maintain sufficient funds in your account in order to execute the order successfully. If you have a shortfall in funds required, the order will get cancelled due to insufficient funds.

By following these steps you can buy any commodities in Zerodha. In case you buy Futures or options of commodities, make sure to square off these positions before the last expiry of the month to prevent physical delivery. The same applies to Long or Short positions in any commodities. Also, try to keep at least 20% more margin money due to the current guidelines of SEBI related to peak-margin money requirements.