What is Equity and Commodity in Zerodha?

Short Answer

Zerodha is India’s top Discount broker that allows its clients to trade in Equity and Commodities. Equity and commodity are two different asset classes in which you can trade as well as Invest. Know what are equity and commodities in detail.

Detailed Answer

About Zerodha:

Zerodha is India’s largest discount broker with over 3.4 million active clients. Zerodha allows its clients to trade in Equity, Commodity, and Currency. It also allows you to trade in Derivatives like Futures and Options in these asset classes.

What is Equity?

The term ‘Equity’ means stock in any company. Equity shares are a category of shares that companies issue. Equity shares and preference shares are the two types of shares that can be traded. Zerodha allows you to trade and invest in Equity (Shares) that are listed on the NSE (National Stock Exchange) as well as BSE (Bombay Stock Exchange). These are the two exchanges from where you can buy and sell shares.

Zerodha allows you to buy shares in CNC (Cash And Carry) as well as Intraday or MIS (Margin Intraday Square off). In intraday trades, you have to square off your position within the same trading day.

Equity is usually used as an investment avenue by investors who buy and hold shares of companies. Zerodha also allows trading in Equity Derivatives such as Stock Options and Stock Futures. These are separate trading tools that Zerodha offer to its users. In derivatives, the underlying asset is not exchanged. Instead, the buyer and seller of the derivatives contract trade these on an agreement to exchange the underlying on a certain date and at a certain price.

What are Commodities?

Commodities are traded similar to equities but they are altogether different from Equity. Commodities include Gold, Silver, Aluminium, Crude Oil. These are traded in derivatives such as Futures and Options. These cannot be bought and stored in your Demat for the long term. As every derivatives contract has an expiry date on which the holder of the contract has to take or give delivery of the underlying. Unlike Equities, these are used for mostly speculation purposes by traders.

In Zerodha you can trade in commodities in Intraday (MIS) or take overnight positions using (NRML) orders. These commodities are traded on the MCX (Multi Commodity Exchange). Zerodha is a member of the MCX hence the users of Zerodha can easily trade in commodities.

To start trading in Commodities you have to enable the commodities segment in Zerodha which costs Rs 100. This can be either done at the time of account opening or at any given point in time. Some documents like Income proof are to be submitted while requesting the Commodities segment.

Equity and Commodity:

Zerodha offers both Equity and Commodities trading to its clients. The brokerage charges for trading in commodities are also reasonable at Rs 20 per order. To activate the Derivatives and Commodities segment you need to submit some documents in order to verify your income and risk-taking capacity. Some of these documents include ITR, Salary Slip, Form16, Demat Holding statement, etc. Once you submit any one of the following, you can trade in Equity and commodities.

Tagged With: ZerodhaStockbrokerEquityCommodityEquity TradingCommodity Trading
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Related FAQs

How to enable Commodity Segment in Zerodha? Activate Account

You want to enable commodity segment in Zerodha, but wondering how it's done. Here we'll discuss ways to activate the commodity segment in your Zerodha account and open a new Commodity account with the leading discount broker in India.

How to buy commodities in Zerodha?

Commodities are a separate segment that you have to get activated in Zerodha in order to trade in them. Once you submit some basic documents such as your income proof or salary slip, it will get activated. After that, you can buy or sell any commodity on Zerodha.

Does Zerodha provide Virtual Trading?

No, Zerodha does not offer a virtual trading platform to its clients. However, if you want to access simulated trading, there is a platform called "Streak", a partner of Zerodha. Zerodha's trading platform is primarily aimed at engaged market participants.

What is the difference between Equity vs Commodity?

Equity and Commodity are the terms which we hear in everyday lives. These terms are used which helps in explaining trades and investments in the share market by investing funds done by buying or selling.

How to withdraw money from Zerodha Trading Account?

To withdraw money from your Zerodha trading account, you need to place a withdrawal request by logging into Zerodha Console. Withdrawal of money is completely free. As per regulations, the withdrawal money will be credited only to the bank account which is mapped with Zerodha.

How can one execute intraday trades on Zerodha?

Intraday trading on Zerodha can be executed with ease by choosing the type of trades you want to engage in. These could be NIFTY, BANK NIFTY, or future options of companies. Once you choose the respective lot, then choose the type of orders and then buy the shares. Trade them when you see a profit or wait till a specific point till you recover your investment.

Is Zerodha Streak free? Algo Trading Platform

Zerodha Streak was launched; it was completely free, but not anymore. Right now, you need to pay a fee for using the Zerodha Streak.

Can I automate my trading with Zerodha Streak?

Streak is an online Options trading platform that helps Derivative traders to, create, backtest and deploy their own option strategies in the live market. Streak also provides Algo trading to its users without the need for any coding. This automates the process of trading to a large extent.

Is Zerodha Safe and Reliable Stock Broker for Trading?

A quick answer to this: Yes, Zerodha is a safe and reliable stock broker for trading and long term investment. You might have heard and read so much about Zerodha, a leading and one of the best discount broker in India. It's just amazing to know about their huge customer base and fast growing company. **Do you ever feel that Is Zerodha safe and reliable stock broker for trading and long term investment?

What are advantages of opening Demat and Trading account with Zerodha?

Zerodha was incorporated in the year 2010 by Nitin Kamath, an entrepreneur. The idea behind the firm was to offer high quality services to a huge chunk of population at low cost, and Zerodha is very well known as pioneer of discount model in India.