Military personnel are Indian citizens who serve in the armed forces, ensuring our freedom and safety. We feel safe and sleep peacefully at night because we know that military personnel are awake at the country’s border to protect us from enemies. Military personnel spend a lot of time ensuring our safety, which may result in them not getting a chance to manage their finances properly.
For such military personnel, here is our blog. Today’s blog post will give you 10 essential tips for financial planning for military families.
Importance of Financial Planning for Military Personnel
Sound financial planning ensures financial freedom and a secure future for the armed forces members and their families. Having a financial plan will also provide you peace of mind. Financial planning is a process that involves various steps, such as setting, managing, and tracking your financial goals based on your income. Through a comprehensive financial plan, one can achieve their financial goals.
Financial Planning Tips for Military Members
Various financial planning tips that military personnel can follow to have a safe and secure future are given below:
1. Budgeting
The first step toward proper financial planning is to create a budget and manage all the expenses according to the income. One needs to identify all the sources of income, whether regular or irregular. Generally, an individual should aim to save at least 20% of their monthly income to fulfill their future needs and make provision for emergencies.
2. Optimising Military Benefits
Military personnel are accommodated in cantonment areas, and some are allowed a house rent allowance (HRA). In India, military personnel’s children are also granted scholarships and fee concessions for education. Hence, this will help them save on costs and invest the saved amount.
3. Emergency Fund
An emergency fund acts as a financial buffer and is essential during financial emergencies. Setting aside funds for emergencies provides peace of mind and reduces stress during economic uncertainty. It also helps you maintain your current lifestyle and allows military personnel to handle emergencies without depending on anyone.
4. Debt Management
Debt management is essential for keeping finances in line. For this, they must make a list of all the debt, including the amount owed, interest rates, due dates, etc. After considering all the outstanding debt, you can reduce unnecessary expenses and free up more money to pay off debt. Military personnel should also ensure timely repayment of debt to avoid any late fees.
5. Retirement Planning
In India, the retirement age for military personnel ranges from 52 to 60 years, depending on rank and other criteria. They can plan their retirement by investing in equities, which can give high returns over the long term. After retirement, they can also start their businesses. For retirement planning, equity investments can be the most suitable option for long–term growth. One can consult a financial planner or financial advisor for advice.
6. Enhancing Knowledge
In the world of finance, there are various assets, and one needs to consider the correct investment vehicle that suits one’s risk profile and investment goals and understand its associated risk. To do this, they need to continuously work on enhancing their knowledge through various financial workshops and attend training sessions online.
7. Managing Large Expenses
To prepare for large expenses, one needs to have a well-defined plan and make provision for such costs beforehand. For example, if military personnel wish to purchase a house, they must save and invest in the early stages of their career.
8. Risk Planning
Proper risk planning is essential for military personnel because of the risks they face during their services. They must opt for a comprehensive life insurance policy to protect the future of their family members.
9. Tax Management
Managing the tax is a key tool for successful financial planning, as there are various options through which military personnel can save tax on their income by reducing their taxable income. As we all know, two tax regimes are available in India, and one must consider the most suitable regime. They must also keep themselves updated about the changes in tax laws and regulations and can consult a tax expert for further information.
10. Will
A will is a key document in financial or estate planning. This statement states how a person’s asset will be transferred to their legal heir or family members in case of death. In the absence of a proper will, conflicts might arise in the family. Having a will gives you peace of mind that your financial assets will be transferred according to your wish, helping you ensure a secure future for your family members.
Financial Planning for Military Personnel with Pocketful
To honour those who serve the nation, Pocketful is offering lifetime free brokerage across all segments for Army, Navy, and Air Force personnel, including ex-servicemen and women. Now, you can start investing and trading in equities and commodities, which have the potential to generate high returns in the long run. This is an initiative by the company’s founders to thank the military personnel for their services to the country.
Conclusion
On a concluding note, military personnel spend their lives protecting us from our enemies, and it is our duty to help them in every possible way. They also need a proper financial plan to secure their family’s financial future, and the 10 tips mentioned in the blog will certainly help them. However, once the financial planning is done, it must be reviewed regularly and adjusted according to the changing circumstances. However, it is advised to consult a financial advisor before investing in the stock market.
Frequently Asked Questions (FAQs)
Can military personnel invest in stocks?
Yes, military personnel can invest in stocks. They can open a demat account with Pocketful as they are offering lifetime free brokerage to all those who have served and are currently serving in the Indian Armed Forces.
How much should military personnel keep as an emergency fund?
Military personnel should keep at least 6 months of their salary in the form of an emergency fund to meet any unexpected liabilities.
Is there any special fund for armed forces personnel?
The National Defence Fund was set up by the Government of India in 1962 for the welfare of the members of the armed forces and their dependents.
Is the defence pension tax-free in India?
Yes, pensions received by the Indian Armed Forces personnel or their families are fully tax-exempt.
आजकल निवेशकों के बीच पेनी स्टॉक्स (Penny Stocks) का चलन तेजी से बढ़ रहा है। यह स्टॉक्स कम कीमत वाले होते हैं। चूँकि, इनका मार्किट शेयर कम होता है, कॉस्ट कम होती है, इस कारणवश इनमें ग्रोथ की सम्भावना अधिक होती है। यही कारण है कि निवेशक पेनी स्टॉक्स की ओर आकर्षित होते हैं।
जबकि पेनी स्टॉक्स में निवेश करने से उच्च लाभ की संभावना हो सकती है, इसके साथ ही इसमें जोखिम भी अधिक होता है। इस ब्लॉग में हम जानेंगे कि पेनी स्टॉक्स क्या होते हैं, क्यों लोग इनमें निवेश करते हैं, इनके जोखिम क्या होते हैं, और इन्हें चुनने के लिए किन बातों का ध्यान रखना चाहिए। पेनी स्टॉक्स निवेशकों को आकर्षित करते हैं, लेकिन इन्हें समझने और सही तरीके से निवेश करने के लिए सही जानकारी का होना बेहद जरूरी है।
पेनी स्टॉक क्या हैं?
पेनी स्टॉक वह स्टॉक्स होते हैं जिनकी कीमत काफी कम होती है, आमतौर पर ₹1-₹100 के बीच। ये छोटे और मिड कैप कंपनियों के होते हैं जिनके शेयरों का ट्रेडिंग वॉल्यूम कम होता है। इस प्रकार के स्टॉक्स को अक्सर कम प्रतिष्ठित और रिस्की माना जाता है, क्योंकि इन कंपनियों का मार्केट कैप भी छोटे होते हैं और उनका व्यापार भी सीमित हो सकता है। इन स्टॉक्स का कारोबार शेयर बाज़ारों में कम मात्रा में होता है, और उनकी लिक्विडिटी भी सीमित हो सकती है, यानी ये स्टॉक्स आसानी से खरीदे या बेचे नहीं जा सकते।
पेनी स्टॉक्स को मुख्य रूप से शेयर बाज़ार में अपने नाम का प्रचार करने वाली नई कंपनियां या पुरानी कंपनियां जो संकट में हैं, द्वारा जारी किया जाता है। हालांकि इन कंपनियों की प्रदर्शन क्षमता का पूर्वानुमान लगाना मुश्किल हो सकता है, परंतु इनकी कीमत के कारण इन शेयरों में निवेशक अधिक जोखिम उठाते हैं। लेकिन, जब इन कंपनियों की स्थिति सुधरती है या उनमें उछाल आता है, तो पेनी स्टॉक्स के निवेशक को भारी लाभ भी हो सकता है।
भारत के सर्वश्रेष्ठ अच्छे पेनी स्टॉक सूची ₹1-₹100 – Penny Stock List In Hindi
नीचे दी गई तालिका बाजार पूंजीकरण के आधार पर सर्वश्रेष्ठ पेनी स्टॉक्स को दर्शाती है, जो निवेशकों को संभावित उच्च रिटर्न के लिए एक अद्भुत अवसर प्रदान करती है।
नाम
कीमत (₹)
सेक्टर
मार्केट कैप
1वर्ष का रिटर्न
3Y रिटर्न
5 साल का रिटर्न
पीई
मार्केट कैप (₹ करोड़)
वॉल्यूम
वोडाफोन आइडिया लिमिटेड
₹9.11
संचार सेवाएँ
Mid Cap
-39.67%
-24.40%
87.84%
-1.81
62241.94
485924287
यूनिटेक लिमिटेड
₹9.81
रियल एस्टेट
Small Cap
-21.20%
188.53%
717.50%
-0.67
2446.24
1109076
जीटीएल इन्फ्रास्ट्रक्चर लिमिटेड
₹1.89
संचार सेवाएँ
Small Cap
14.55%
-19.57%
440%
0
2420.53
40941617
डिश टीवी इंडिया लिमिटेड
₹8.76
उपभोक्ता चक्रीय
Small Cap
-58.68%
-49.94%
-31.29%
-0.83
1620.33
6482981
सर्वेश्वर फूड्स लिमिटेड
₹8.38
उपभोक्ता रक्षात्मक
Small Cap
22.34%
530.08%
1481.13%
41.9
817.31
1993722
मिष्टान फूड्स लिमिटेड
₹7.53
उपभोक्ता रक्षात्मक
Small Cap
-58.72%
-53.60%
32.57%
2.15
800.67
3235289
विकास लाइफकेयर लिमिटेड
₹4.00
वित्तीय सेवाएं
Small Cap
-39.39%
-42.45%
74.67%
-57.14
748.64
3209929
नंदन डेनिम लिमिटेड
₹4.69
उपभोक्ता चक्रीय
Small Cap
72.43%
-13.79%
330.28%
0
700.56
2995947
जीवीके पावर एंड इंफ्रास्ट्रक्चर लिमिटेड
₹4.51
रियल एस्टेट
Small Cap
-67.67%
-20.88%
17.14%
1.29
699.59
332100
इवेक्सिया लाइफकेयर लिमिटेड
₹3.43
आधारभूत सामग्री
Small Cap
51.77%
-29.13%
-61.11%
42.88
662.7
6769881
सनशाइन कैपिटल लिमिटेड
₹1.12
वित्तीय सेवाएं
Small Cap
-40.74%
558.82%
1500%
-2.6
611.81
5847267
सकुमा एक्सपोर्ट्स लिमिटेड
₹3.68
वित्तीय सेवाएं
Small Cap
-14.02%
35.79%
183.08%
12.57
578.49
690444
सनशाइन कैपिटल लिमिटेड
₹1.03
वित्तीय सेवाएं
Small Cap
-46.77%
529.41%
1428.57%
-2.49
559.52
11656712
विकास इकोटेक लिमिटेड
₹3.07
उपभोक्ता चक्रीय
Small Cap
-24.82%
-43.78%
92.59%
28.36
551.84
2182955
फिलाटेक्स फैशन्स लिमिटेड
₹0.68
उपभोक्ता चक्रीय
Small Cap
-95.97%
-90.25%
-81.03%
82.35
550.05
26214605
नागार्जुन फर्टिलाइजर्स एंड केमिकल्स लिमिटेड
₹9.00
आधारभूत सामग्री
Small Cap
-34.80%
-35.04%
63.57%
0.26
547.83
417747
एफसीएस सॉफ्टवेयर सॉल्यूशंस लिमिटेड
₹3.14
तकनीकी
Small Cap
-34.64%
-55.97%
1485%
-158.5
541.93
2317757
स्पेसनेट एंटरप्राइजेज इंडिया लिमिटेड
₹8.60
तकनीकी
Small Cap
-72.61%
285.91%
638.26%
40.43
479.19
7673882
एक्सारो टाइल्स लिमिटेड
₹9.70
आधारभूत सामग्री
Small Cap
-12.73%
-28.08%
-24.87%
-148.33
444.73
813647
अलस्टोन टेक्सटाइल्स (इंडिया) लिमिटेड
₹0.70
वित्तीय सेवाएं
Small Cap
-48.15%
337.50%
337.50%
0
439.24
5474179
21 जनवरी, 2025
यह तालिका निवेशकों के लिए सबसे चर्चित और संभावनाशील पेनी स्टॉक्स को प्रस्तुत करती है।
लोग पेनी स्टॉक्स में निवेश क्यों करते हैं?
लोग पेनी स्टॉक्स में निवेश करने के कई कारण हो सकते हैं। यहां कुछ मुख्य कारण दिए गए हैं:
कम कीमत, उच्च लाभ की संभावना: पेनी स्टॉक्स की कीमत कम होती है, जिससे निवेशक इन्हें सस्ते में खरीद सकते हैं। यदि किसी कंपनी का शेयर मूल्य अचानक बढ़ता है, तो निवेशकों को अत्यधिक लाभ मिल सकता है। उदाहरण के लिए, अगर किसी स्टॉक की कीमत ₹5 है और वह ₹50 तक पहुंच जाती है, तो निवेशक को 10 गुना लाभ हो सकता है।
नई कंपनियों में निवेश: पेनी स्टॉक्स अक्सर नई और विकासशील कंपनियों से संबंधित होते हैं। कुछ निवेशक इन कंपनियों में निवेश करने का जोखिम उठाते हैं, क्योंकि उन्हें लगता है कि भविष्य में इन कंपनियों के शेयरों की कीमत बढ़ सकती है। इन कंपनियों के पास विकास की अपार संभावनाएं हो सकती हैं।
अधिक व्यापारिक अवसर: छोटे शेयरों में व्यापार की अधिक संभावना होती है, खासकर अगर किसी कंपनी के बारे में कोई अच्छी खबर आती है या कोई नई डील होती है। ऐसे शेयरों में गुमनाम कंपनियों के बारे में भी अनजान जानकारी लीक हो सकती है, जो एक साथ कई निवेशकों को आकर्षित करती है।
अल्पकालिक लाभ की तलाश: कुछ निवेशक पेनी स्टॉक्स में त्वरित लाभ की तलाश करते हैं। वे इन स्टॉक्स में कम कीमत में निवेश करते हैं और जब कीमत कुछ समय बाद बढ़ती है, तो वे जल्दी से बेचकर मुनाफा कमा लेते हैं।
पेनी स्टॉक्स में निवेश करते समय आपको कुछ महत्वपूर्ण जोखिमों का सामना करना पड़ सकता है:
मूल्य में अत्यधिक उतार-चढ़ाव: पेनी स्टॉक्स की कीमत में बहुत अधिक उतार-चढ़ाव हो सकता है, जिससे निवेशकों को भारी नुकसान हो सकता है। कभी-कभी ये स्टॉक्स अचानक गिर सकते हैं या फिर बेतहाशा बढ़ सकते हैं, और निवेशक इस अस्थिरता के कारण बड़ा नुकसान उठा सकते हैं।
नियंत्रण की कमी: छोटे बाज़ार पूंजीकरण वाली कंपनियों के स्टॉक्स में लिक्विडिटी की कमी हो सकती है, यानी ये स्टॉक्स आसानी से खरीदे या बेचे नहीं जा सकते। इससे निवेशकों को शेयरों को बेचने में कठिनाई हो सकती है, खासकर जब वे जल्दी से बाहर निकलने की कोशिश करते हैं।
कंपनियों की स्थिति का अस्पष्ट होना: पेनी स्टॉक्स अक्सर छोटी कंपनियों से संबंधित होते हैं, जिनकी वित्तीय स्थिति और भविष्य की दिशा स्पष्ट नहीं होती। इन कंपनियों के बारे में जानकारी हासिल करना कठिन हो सकता है, और बिना उचित जानकारी के निवेश करना जोखिमपूर्ण हो सकता है।
घटित होने वाली धोखाधड़ी: छोटे स्टॉक्स में अक्सर धोखाधड़ी के मामले सामने आते हैं, क्योंकि इन कंपनियों पर निगरानी कम होती है। धोखाधड़ी, जैसे कि इनवेस्टर्स को झूठी जानकारी देना या बाज़ार की स्थिति को बढ़ा-चढ़ाकर पेश करना, इन स्टॉक्स में आम होता है। इसलिए इन स्टॉक्स में निवेश करते समय अतिरिक्त सतर्कता बरतनी चाहिए।
लिक्विडिटी का संकट: पेनी स्टॉक्स में ट्रेडिंग वॉल्यूम कम होता है, जिससे इन्हें जल्दी से बेचना मुश्किल हो सकता है। लिक्विडिटी की कमी के कारण निवेशक चाहकर भी अपने शेयरों को बेच नहीं पाते हैं और फिर उन्हें घाटे का सामना करना पड़ सकता है।
पेनी स्टॉक्स का चुनाव करते समय आपको कुछ महत्वपूर्ण बातें ध्यान में रखनी चाहिए:
कंपनी की वित्तीय स्थिति: कंपनी के फंडामेंटल्स, जैसे उसकी आय, लाभ, और कर्ज की स्थिति, का विश्लेषण करें। केवल कंपनी की कम शेयर कीमत देखकर निवेश न करें। कंपनी के पास उचित प्रबंधन, पूंजी, और उत्पादकता होनी चाहिए।
विकास की संभावनाएं: यह जानने की कोशिश करें कि क्या कंपनी के पास भविष्य में विकास की कोई योजना है, जैसे नई उत्पाद लाइन या नए बाज़ार में प्रवेश करना। एक मजबूत और स्थिर विकास रणनीति कंपनी को लंबी अवधि में सफलता दिला सकती है।
निगरानी और अनुसंधान: पेनी स्टॉक्स में निवेश से पहले गहन अनुसंधान करें। कंपनी की आर्थिक स्थिति और विकास की संभावनाओं के बारे में अधिक से अधिक जानकारी इकट्ठा करें। निवेशकों को कंपनी के प्रबंधन और उनके व्यवसाय की समझ पर भी ध्यान देना चाहिए।
लिक्विडिटी की स्थिति: ऐसे पेनी स्टॉक्स चुनें जिनकी लिक्विडिटी अच्छी हो, यानी जिनके शेयरों में कारोबार अधिक हो। इससे आपको शेयर खरीदने और बेचने में आसानी होगी।
बाज़ार की स्थिति: यह सुनिश्चित करें कि आपके द्वारा चुने गए पेनी स्टॉक की मूल्यवृद्धि बाज़ार की मौजूदा स्थिति और ट्रेंड के अनुसार हो रही है। विशेष रूप से, वैश्विक आर्थिक स्थितियां और ट्रेडिंग ट्रेंड्स का पालन करें, क्योंकि ये स्टॉक्स के मूल्य को प्रभावित कर सकते हैं।
पेनी स्टॉक्स में निवेश के सुझाव
धैर्य रखें: पेनी स्टॉक्स में निवेश करते समय धैर्य रखना बहुत महत्वपूर्ण होता है। इन स्टॉक्स में निवेश से त्वरित लाभ की उम्मीद न करें। निवेश को लंबी अवधि के लिए देखें और हमेशा तैयार रहें कि यह उच्चतम लाभ के लिए समय ले सकता है।
विविधता बनाए रखें: केवल एक पेनी स्टॉक में निवेश करने के बजाय, विभिन्न पेनी स्टॉक्स में निवेश करें। इससे जोखिम कम हो सकता है। विविधता से आपका निवेश पोर्टफोलियो संतुलित रहता है और एक कंपनी की खराब प्रदर्शन के बावजूद स्थिरता बनी रहती है।
नुकसान को सीमित करें: पेनी स्टॉक्स में निवेश करते समय, नुकसान को सीमित करने के लिए स्टॉप लॉस का इस्तेमाल करें। स्टॉप लॉस आदेश निवेशकों को निश्चित सीमा तक नुकसान उठाने के बाद अपने शेयरों को बेचने का मौका देता है।
निवेश की राशि सीमित रखें: पेनी स्टॉक्स में निवेश करते समय, अपनी निवेश राशि सीमित रखें। इन स्टॉक्स में जोखिम अधिक होता है, इसलिए कभी भी अपनी पूरी पूंजी इन स्टॉक्स में न लगाएं। इससे आप बड़े नुकसान से बच सकते हैं।
निरंतर निगरानी रखें: पेनी स्टॉक्स में निवेश करने के बाद, नियमित रूप से इनके प्रदर्शन की निगरानी रखें। निवेश से पहले आप जो उम्मीदें कर रहे हैं, उनकी तुलना करें और बदलती परिस्थितियों में निवेश को पुनः मूल्यांकन करें।
पेनी स्टॉक्स के वास्तविक उदाहरण
रजनीश वेलनेस: यह एक स्वास्थ्य और कल्याण कंपनी है, जो पेनी स्टॉक के रूप में काफी चर्चित है। इसकी शेयर कीमत ₹10 से नीचे रहती है।
जेनिथ हेल्थकेयर: यह एक फार्मास्युटिकल कंपनी है, जो निवेशकों के बीच आकर्षण का केंद्र है। इसकी शेयर कीमत भी ₹10 के आसपास रहती है।
पेनी स्टॉक्स में निवेश करना जोखिमपूर्ण हो सकता है, लेकिन अगर आप सही तरीके से निवेश करते हैं, तो आपको इसके जरिए अच्छे लाभ भी हो सकते हैं। पेनी स्टॉक्स को चुनने से पहले कंपनी के फंडामेंटल्स और विकास की संभावनाओं का विश्लेषण करें और सही निवेश रणनीति अपनाएं। याद रखें, निवेश में हमेशा जोखिम होता है, इसलिए अपने निवेश पर ध्यान से निर्णय लें। निवेशक को सही अनुसंधान, सतर्कता, और जोखिम प्रबंधन का पालन करके पेनी स्टॉक्स से अच्छे लाभ प्राप्त हो सकते हैं।
अक्सर पूछे जाने वाले प्रश्नों
पेनी स्टॉक क्या होते हैं?
पेनी स्टॉक्स वे स्टॉक्स होते हैं जिनकी कीमत कम होती है। ये आमतौर पर छोटी कंपनियों के होते हैं जिनकी बाज़ार पूंजीकरण (market capitalisation) भी कम होती है। इन स्टॉक्स में निवेश करना जोखिमपूर्ण हो सकता है, लेकिन इनमें अधिक लाभ की संभावना भी हो सकती है यदि कंपनी का प्रदर्शन अच्छा होता है।
पेनी स्टॉक्स में निवेश करते समय किन जोखिमों का सामना करना पड़ सकता है?
पेनी स्टॉक्स में निवेश करते समय आपको अत्यधिक मूल्य उतार-चढ़ाव, लिक्विडिटी की कमी, कंपनियों की स्थिति का अस्पष्ट होना, आदि जोखिमों का सामना करना पड़ सकता है।
क्या पेनी स्टॉक्स में निवेश से उच्च लाभ हो सकता है?
हां, पेनी स्टॉक्स में निवेश से उच्च लाभ हो सकता है, खासकर यदि कंपनी का प्रदर्शन अच्छा होता है और उसका स्टॉक मूल्य बढ़ता है। उदाहरण के लिए, यदि किसी पेनी स्टॉक की कीमत ₹5 है और वह ₹50 तक पहुंच जाती है, तो निवेशक को 10 गुना लाभ हो सकता है।
पेनी स्टॉक्स कैसे चुनें?
पेनी स्टॉक्स चुनते समय आपको कंपनी की वित्तीय स्थिति, विकास की संभावनाओं, बाज़ार की स्थिति, और लिक्विडिटी की जांच करनी चाहिए। सही पेनी स्टॉक्स का चुनाव करते समय कंपनी की समग्र रणनीति और भविष्य के लिए विकास की योजना पर ध्यान देना महत्वपूर्ण है।
सबसे अच्छा पेनी शेयर कौन-सा है?
सर्वोत्तम पेनी स्टॉक की विशेषताओं में मजबूत वित्तीय स्थिति, अनुभवी प्रबंधन, लगातार बढ़ता मुनाफा आदि शामिल हैं।। कुछ कंपनियों जैसे रजनीश वेलनेस, जेनिथ हेल्थकेयर, आदि ने अच्छे प्रदर्शन का संकेत दिया है। इन कंपनियों के शेयरों में निवेश से पहले उनकी वित्तीय स्थिति और संभावनाओं का गहन विश्लेषण करना महत्वपूर्ण है, क्योंकि पेनी स्टॉक्स में हमेशा उच्च जोखिम होता है।
Commodity trading is the process of buying and selling commodities such as crude oil, gold, agricultural products, etc. Numerous trading opportunities emerge for traders every day, but unfortunately, risk also accompanies commodity trading. These risks arise from geopolitical and other economic factors, making this market very volatile and filled with high-risk-reward trading opportunities.
This blog focuses on the different risks involved and risk management in commodity trading. We will explain the major risks and describe the strategies to tackle them.
5 Key Risks in Commodity Trading
Commodity trading risks are the various risks that traders face while participating in the commodity market. These risks are determined by factors such as the supply-demand balance, general macroeconomic conditions, and sometimes the impact of unexpected events. Below are the most important risks, with examples cited and techniques on how to manage them.
1. Price Volatility Risk
What it is:
One of the greatest risks in commodity trading is price volatility. Commodities are extremely sensitive to supply and demand, political instability, weather conditions, or any other natural disasters.
Examples:
A rise in crude oil prices was observed in 2022 when the war began between Ukraine and Russia.
The price of wheat and many other commodities was high due to the drought affecting specific regions.
How to Manage:
Set stop-loss orders in volatile market conditions.
Diversify your trading positions across different commodities in order to minimize risk.
Track the latest market trends and make quick trading decisions according to them.
2. Credit Risk
What it is:
Credit risk arises when a party in the commodity trading contract fails to meet his financial obligations. This occurs in OTC markets.
Examples:
A buyer fails to make payment upon maturity of the forward contract.
A counterparty defaults and is unable to deliver commodities as specified in the forward contract.
How to Manage:
Engaging in regulated exchanges with clearinghouses that eliminate counterparty risks.
Conduct due diligence before entering into contracts with counterparties.
Security deposits or collateral agreements so that counterparty fulfills the contract obligations.
3. Geopolitical Risk
What it is:
Events such as wars, trade restrictions, and political instability can cause a disruption in the supply chain and dramatically influence commodity prices.
Examples
Sanctions on Russian oil exports caused a global shortage of crude oil in 2022.
China placed restrictions on the export of rare earth metals in 2023, which affected the semiconductor manufacturing companies that use them as raw materials.
How to Manage:
Monitor recent news in the world to be able to anticipate any disruption beforehand.
Use derivative instruments to fix prices and reduce uncertainty.
4. Leverage Risk
What it is:
Leverage enables the trader to create large positions with relatively small amounts of capital. Both profits and losses are magnified using leverage. Overuse of leverage can lead to huge losses.
Examples:
A trader’s long position in gold futures with high leverage can result in huge losses if there is an unexpected drop in gold prices.
High levels of leverage caught many retail traders off-guard when the price of oil crashed overnight in 2020.
How to manage:
Limit the use of leverage by ensuring that position size is aligned with your level of risk tolerance.
Maintain a sufficient balance in your trading account to avoid margin calls.
5. Liquidity Risk
What it is:
Liquidity risk occurs when not enough trading activity is happening in the commodities market. Without sufficient liquidity, creating a long or short position in a commodity can be challenging without affecting its price.
Examples:
Commodities like lead and copper usually have lower liquidity than crude oil or gold.
When the economy experiences a recession, market participation reduces, and liquidity worsens.
How to control:
Trade in high-liquidity commodities such as crude oil, gold, and natural gas.
Monitor the trading volumes and identify trading sessions during which market activity usually declines and avoid trading during that session.
How to Effectively Manage Risks in Commodity Trading
Identifying the possible risks may be the first step, but a comprehensive risk management strategy provides you with a plan to mitigate these risks. Below are a few ways to manage the risks in commodity trading effectively:
Developing a Risk Management Plan: Begin with a comprehensive plan that defines your risk tolerance, investment goals, and exit strategies.
Derivative Instruments: Derivatives include futures, options, and swaps. Such instruments can be used to hedge the risks that exist in commodity trading.
Stay Informed on Market Developments: Use real-time market data and news to anticipate future events and the associated risks. Most commodity trading platforms provide regular updates that help traders make the right decisions.
Diversify Your Portfolio: Allocate your trading capital across different commodity types so that you don’t suffer a huge loss due to unfavorable events affecting a particular commodity.
Use Technology: The most advanced trading platforms have all these sophisticated tools, such as algorithmic trading bots, risk analytics, and automated alerts, which allow traders to make swift decisions and, thereby, reduce risks.
Set Realistic Expectations: Don’t be tempted to overtrade and chase high returns. Consistent profits arise from disciplined trading and proper risk management.
Buying and selling commodities is considered risky, but you can master it with a disciplined approach to risk management and a well-defined trading strategy. Active risk management approach and advanced trading platforms can help you avoid major risks arising from price volatility, high leverage or geopolitical events. Before trading in commodities, one must make sure that one’s knowledge, trading strategy, and risk management system are in place in order to remain successful over the long term.
Some of the most volatile commodities are crude oil, natural gas, and lead. Their prices can change sharply due to supply-demand imbalances, weather conditions, or geopolitical events.
How can I avoid losses due to leverage?
You can avoid losses due to leverage by creating conservative trading positions, maintaining sufficient margins, and having strict stop-loss levels to prevent significant drawdowns.
What is the best way to hedge in commodity markets?
The best way to hedge is by using derivative instruments such as futures and options.
Can I trade commodities with minimal risk?
No trade can be completely risk-free; however, you can definitely minimize risks by trading in highly liquid commodities, designing sophisticated risk management tools, and using leverage judiciously.
What is the role of diversification in commodity trading?
Diversifying the portfolio ensures the lowering of risk by spreading investments across many classes of commodities like energy, metals, and agriculture. If there is an adverse price change for a certain commodity, the rest can mitigate losses by performing well, ensuring effective risk management during volatile markets.
Picture a fast-paced market where prices fluctuate every few seconds, requiring quick decision-making. In such a situation, we can’t rely solely on human intuition. This is where algorithmic trading comes into action. It uses computer programs to analyze data and execute trades automatically based on predetermined criteria.
This blog will explain algorithmic trading, popular strategies, its growing popularity, and its impact on the future of trading.
What is an Algorithmic Trading Strategy?
An algorithmic trading strategy is a systematic method for trading financial instruments like stocks, bonds, commodities, or currencies using computer algorithms. These strategies use complex mathematical models and fast computers to analyze data, spot trading opportunities, and execute trades automatically. Algorithmic strategies improve trading efficiency and profitability by removing human error and emotions from decision-making.
Algorithms use real-time data and historical data, such as price feeds, economic indicators and social media sentiment. Orders are automatically executed when the strategy’s conditions are met, usually in milliseconds. Algorithmic strategies are tested on past data to confirm their reliability and performance in different market conditions.
The five best algorithmic trading strategies mentioned below will likely stay relevant in the future.
1. Mean Reversion: This is a strategy that takes advantage of asset prices returning to their historical averages. It involves identifying assets that are overvalued or undervalued and placing trades accordingly.
2.Trends Following: Trend following strategy seeks to capitalize on the persistence of current market trends. These algorithms detect and follow trends using technical indicators to find when to enter and exit trades.
3. Arbitrage: Arbitrage strategy takes advantage of differences in prices of the same asset in two different markets. High-frequency trading (HFT) algorithms excel at spotting and taking advantage of quick opportunities.
4. Statistical arbitrage (Stat Arb): This strategy involves finding and taking advantage of statistical relationships among various assets. It often means creating asset portfolios with a low correlation among assets to lower overall risk.
Some other algorithmic trading strategies, apart from those mentioned above, are as follows,
VWAP (Volume-Weighted Average Price Strategy): This strategy seeks to execute orders at prices near the day’s average based on the volume traded at each price level. In this strategy, the trader breaks a large order into smaller parts for execution over a set time frame.
Pair Trading: This is a market-neutral strategy that involves identifying correlated securities and trading on their temporary mispricing.
Index Arbitrage: This strategy takes advantage of price differences between an index and its underlying stocks. If an index’s price diverges from its underlying components, an arbitrage algorithm will buy or sell to take advantage of the price difference.
How to Start Algo Trading Strategies with Pocketful API
The Pocketful API provides traders and investors with professional tools for algorithmic trading. It supports various programming languages like Python, Javascript, and Golang, making it accessible to many users. The API enables easy order placement, real-time market data access, portfolio management, etc. Pocketful streamlines the creation and execution of algorithms for better efficiency and speed.
To get started, you need a basic computer, a good internet connection, and an interest in trading. Furthermore, Pocketful APIs are completely free to use with no hidden charges. The steps to start algo trading using Pocketful API are mentioned below:
Step 1: Log in to Pocketful Web and enter your login credentials.
Step 2: Generate AppId and AppSecret by creating a new app.
Step 3. Authenticate by entering your login details in the authentication section to generate an access token.
Step 4: Start coding to automate trading strategies with Pocketful APIs.
Reasons for Algo Trading’s Growing Popularity
Algorithmic trading is now essential in today’s financial markets. Its increasing popularity among institutional and retail investors is due to technological advancements, changing market dynamics, and the need for efficiency and speed in trading. Below are some of the reasons behind algo trading’s growing popularity:
Speed & Efficiency: Algo trading executes trades in milliseconds, which is much faster than any human trader. This eventually helps in seizing trading opportunities in volatile market conditions.
Cost Effectiveness: Algo trading automated trading, reducing the need for human intervention and lowering transaction costs. Reduced manual input lowers overhead costs for trading desks.
Elimination of emotional bias: Human emotions such as fear, greed, and overconfidence can result in bad trading choices. Algorithms operate based on predefined rules and are unaffected by psychological factors. The outcome is consistent decision-making and disciplined execution.
Advanced data processing capabilities: Real-time data analysis is a game changer for traders. Algorithmic trading uses large datasets with historical and real-time prices and news to identify trading opportunities.
Growing availability of technology: Advancements in computing, internet infrastructure, and financial software have made algo trading more accessible to a wider audience.
Diversified strategies: Algo trading offers various strategies to cater to traders with different goals and risk levels. Examples include statistical arbitrage, news-based trading, momentum trading, and mean reversion.
Better risk management: Algo trading strategies include risk controls to reduce exposure in unfavorable market conditions. The algorithms execute trades automatically to minimize losses or lock in your profits.
Rise of AI and Machine Learning: AI and machine learning have revolutionized algorithmic trading, allowing for flexible responses to complex market situations. Sentiment analysis uses algorithms to evaluate social media, news, and public opinions for practical insights.
Backtesting Feature: Traders can use advanced software and historical data to simulate strategies before using them with real capital. Backtesting confirms that strategies will work well in different conditions.
Algorithmic trading strategies have transformed financial markets, enhancing efficiency and making trading more data-driven and systematic. Using the right strategy allows traders to quickly and accurately take advantage of the opportunities. Algorithmic trading will remain essential for retail and institutional investors as technology evolves in fast-changing markets. The concept is becoming popular because it simplifies operations, lowers costs and improves decision-making in competitive financial markets. As technology advances, algorithmic trading will grow more popular and help traders succeed in complex global markets. However, trading can be risky, and it is advised to consult a financial advisor before trading.
Frequently Asked Questions (FAQs)
Who uses algorithmic trading?
Both institutional investors and retail traders use algorithmic trading.
What technologies power algorithmic trading?
Technologies behind the rise of algorithmic trading are machine learning, natural language processing (NLP), big data, and high-speed computing.
Is algorithmic trading safe?
It is safe and legal but regulated to ensure fairness and prevent market manipulation.
What is backtesting in algorithmic trading?
Backtesting evaluates the performance of a trading strategy using historical market data.
What are the risks involved in algo trading?
Common risks include software glitches, market volatility, and overfitting to historical data.
The Maha Kumbh Mela is of significant spiritual importance in Hinduism. This grand event will attract millions of pilgrims and tourists from around the globe, creating substantial economic opportunities for companies or sectors such as tourism, infrastructure, FMCG, etc.
In this blog, we will discuss the sectors and the associated stocks that are likely to benefit from this Maha Kumbh Mela.
What is Maha Kumbh Mela?
The Maha Kumbh Mela, or the Maha Kumbh 2025, is a religious gathering organized after every 12 years. Maha Kumbh Mela 2025 is even more special as it occurs once every 144 years. It is estimated that more than 45 crore people will come and join this religious gathering. It is organized in Prayagraj, Uttar Pradesh, and the state government manages this event. As per various research analysts, it is assumed that this event will increase the country’s GDP by 1%, and the Uttar Pradesh government is estimating a potential turnover of INR 2 Lakh crore. This event will showcase India’s rich cultural heritage globally. The event will begin on 13th January 2025 and end on 26th February 2025.
List of Sector and Stocks which will benefit from Maha Kumbh Mela
The sectors and stocks that could benefit from Maha Kumbh Mela are as follows:
1. Tourism and Hospitality Sector
Millions of tourists and pilgrims will visit the Kumbh Mela, and the demand for travel services, accommodation and hospitality will increase. Various companies that are engaged in providing such services will benefit directly from this. Both affordable and luxury options hotels are available, with ultra-luxury tents priced between ₹70,000 to ₹1,00,000. To cater to the increased demand, the Ministry of Tourism has also set up the Incredible India Pavilion, a 5,000 sq.ft. area for accommodating devotees, scholars, foreign tourists, etc.
Stocks To Watch: The stocks which will benefit from this industry include Thomas Cook, Easy Trip Planners, Indian Hotels Company Limited, TajGVK Hotels & Resorts, and Lemon Tree Hotels.
During the Maha Kumbh, people from all around the world will travel to Prayagraj. Indian Railways is operating 13,000 trains over 50 days. On the other hand, Prayagraj airport has increased weekly departures to 117, connecting 23 cities, and airlines have added special routes. Additionally, Uttar Pradesh State Road Transport Corporation has added 7,000 rural buses alongside 350 shuttle buses.
Stocks To Watch: IndiGo, Spice Jet, and IRCTC (Indian Railway Catering and Tourism Corporation).
The FMCG (Fast Moving Consumer Goods) will see a spike in demand because of an increase in daily essential and packaged foods. Companies engaged in the FMCG sector will benefit greatly from the consumption of products like snacks, beverages, and hygiene essentials.
Stocks To Watch: The FMCG companies benefiting from this Kumbh Mela are Hindustan Unilever, Dabur and ITC.
Communication is the key requirement in the Kumbh Mela as it helps in connectivity among the visitors. It also helps the management centres maintain uninterrupted connectivity throughout the event area. The Department of Telecom has prepared an extensive plan to ensure the same and has established 78 transportable towers, 150 outdoor small cells, and 192 KM of optical fibre cable in the Mela area to maintain uninterrupted services. Telecom players such as Bharti Airtel, BSNL, Reliance Jio, and Vodafone Idea have set up three disaster management centres to ensure proper connectivity during the event.
Stocks To Watch: The major telecom stocks that will benefit from this event are Bharti Airtel, Vodafone Idea, Reliance, etc.
Kumbh’s event will be covered by national and international media, and it will be broadcast live on various networks. Hence, it will generate business for media companies and production houses and also act as a major source of revenue for content creators. Also, the print media sector will benefit from this Maha Kumbh Mela, as various articles will be published in magazines and newspapers.
Stocks To Watch: Zee Entertainment, Network 18, Den Network, Jagran Prakashan, Sun TV, etc.
The temporary and permanent development of tents, toilets, water supply systems, hotels, and other amenities will generate revenues for all the real estate and infrastructure companies. The government has also developed roads and flyovers to provide better transport services.
Stocks To Watch: Larsen and Toubro, IRB Infrastructure Developers, NBCC India, etc., are the companies which will be the primary beneficiaries of infrastructure development in Kumbh Mela.
On a concluding note, the Maha Kumbh Mela is a significant event for Hindus around the world. Maha Kumbh Mela 2025 can set the record for the world’s largest spiritual and cultural gathering, with an expected attendance of over 45 crores. Apart from its religious significance, the Maha Kumbh Mela will also impact the Indian economy positively as it will benefit multiple sectors, such as infrastructure, tourism, hospitality, etc. The benefits of the Kumbh Mela event will not be short-lived, as the improved infrastructure and tourism appeal will continue to benefit the region long after the event concludes. However, investment in a particular sector carries higher risk. Therefore, you are advised to consult your investment advisor before making any investment decision.
Frequently Asked Questions (FAQs)
Which sector will benefit from Kumbh Mela 2025?
The major sectors that are the direct beneficiaries of the Maha Kumbh Mela are infrastructure, transportation, hospitality, FMCG, and media and entertainment.
What is Maha Kumbh 2025?
Maha Kumbh Mela is an event of significant importance in the Hindu religion. The event happens once every 12 years, but the Maha Kumbh Mela of 2025 is a special event as it occurs once every 144 years. This event will take place in Prayagraj from 13th January 2025 to 26th February.
What are some stocks that will benefit from Maha Kumbh Mela?
The stocks that will benefit from the Kumbh Mela are Easy Trip Planners, Yatra Online, Indian Hotels Company Limited, Lemon Tree Hotels, IndiGo, ITC, HUL, IRCTC, etc.
What could be the long-term impacts of Maha Kumbh Mela on different sectors?
The long-term impact of Kumbh Mela is that it will improve infrastructure, boost the local economy and enhance the capacity of different sectors to manage large-scale events in future.
How will the hospitality and tourism sector benefit from the Maha Kumbh Mela?
Tourists attending Maha Kumbh Mela will increase the demand for hotels, guesthouses, and temporary accommodations, which will result in higher revenues for companies operating in the hospitality and tourism sectors.
If you are looking for some tips on how to successfully trade commodities, then this blog is for you. There are various commodity trading tips and tricks through which you can increase your chances of earning a profit while trading in commodities. You can make better commodity trading strategies by incorporating the tips discussed in this blog.
In this blog, we will give you an overview of five tips for successful commodity trading.
Here Are the 5 Tips for Successful Commodity Trading
Commodity trading has gained popularity in recent years. Trading commodities can be difficult for a new trader, but to successfully negotiate the complexity of the commodities market, you must take calculated risks, and for this, you must have proper trading strategies. The following are the five key commodity tips for new traders that can help them succeed in commodity trading:
1. Market Cycle
Similar to other financial markets, the commodities market likewise goes through cycles. The commodity market cycle is affected by various elements, including industrial, geopolitical, and economic. For example, depending on the needs of the area, the demand for fossil fuels for heating purposes may increase in the winter, causing their prices to rise. These short-term cycles offer trading opportunities; however, it is required to manage your risk efficiently.
2. Tracking the Global Events
The prices of commodities are dependent on various international events. A trader must keep track of these events to see patterns and make wise judgments. For example, a rise in geopolitical tension or political instability can cause the demand for safe havens such as gold and silver to rise, resulting in an increase in the price of gold. Reuters, Bloomberg, and other platforms are available to track world events. In addition, several government organizations disclose various kinds of data on a weekly or monthly basis, which must also be monitored. The performance of a specific commodity is directly impacted by such news and data.
Commodity trading is characterized by significant volatility, which is caused by several variables, including supply and demand, global events, market liquidity, etc. Thus, it is crucial to understand volatility to effectively manage risk. The two main determinants of volatility are supply and demand; commodities with limited supply are typically more volatile, whereas those with abundant supply have low volatility. Due to their widespread use in various industries, base metals like copper and aluminium saw a sharp increase in price during periods of economic expansion.
4. Leveraged Positions
Leverage allows a trader to take on significant market positions with very little capital. This raises the possibility of increasing profit, but it also raises the risk. Borrowing money from the broker is known as leverage, and it is advantageous when the market is moving in your favour. If the market is moving against your trading position, the leveraged position increases your losses. The commodity market is unpredictable, and any significant price change can result in margin calls and large losses for traders. These losses can cause emotional stress and make impulsive trading decisions that further increase losses. Therefore, it is advisable to use leverage with caution.
5. Selecting Broker
Even after designing a profitable trading strategy, you might face issues on how to execute it. There are various commodity trading platforms in the market offered by brokers; however, finding the right broker who offers smooth transaction execution at minimum cost should be one’s top priority. The commodity trading platform must be registered with regulatory bodies such as the Securities and Exchange Board of India. Furthermore, a good broker sends authentic research reports and related study materials to their traders.
Thus, pick a broker like Pocketful that offers you top-notch services at a low cost through their cutting-edge technology-driven platforms. In addition to this, they offer you a variety of tools and enable you to trade in all commodities at the lowest cost, which helps you maximize your profit.
On a concluding note, using the above-mentioned tips, a trader increases his/her probability of being profitable in commodity trading, but doing so calls for self-control and the ability to make wise decisions. The likelihood of designing a profitable trading strategy can be increased by constantly learning new things as the market’s dynamics change so quickly, so it is necessary to be up to date on news and events when trading in the commodity market. If you miss any crucial updates, you could potentially lose money. Before making any investment decisions, it is advisable to speak with your investment advisor because commodity trading carries a high level of risk and may not be appropriate for all market participants.
How much capital do I need to start trading in commodities?
The minimal amount of capital needed to begin trading in the commodity market depends on the commodity being traded. A commodity with a higher contract value requires more margin than a commodity with a lower contract value.
What commodities are best for beginners to start trading?
Beginners can begin trading in commodities such as crude oil, gold, copper, aluminium, etc.
What is commodity trading?
Commodity trading is the process of forecasting future price movements and creating long and short positions in commodities to make money.
How to start commodity trading?
A commodity trading account is necessary to begin trading in commodities. There are various commodities trading platforms in the market, but Pocketful provides the best commodity trading platform with advanced research tools.
What are the most traded commodities in India?
The most common commodities traded by traders in India are gold, silver, and crude oil.
Imagine while reading a newspaper you came to know that the mutual fund industry currently has around 68,00,000 crores of assets under management (AUM), delivering impressive returns to investors. But did you know there are some companies that manage these funds that are also listed on the Indian stock market?
In this blog, we will give you an overview of the stock of top asset management companies stocks in India.
What are Asset Management Companies?
Asset management companies (AMC) are those financial institutions which manage the funds or investments of different categories of investors such as individuals, institutions, businesses, etc. Their main objective is to earn a profit for their investors, and for their services, they charge a certain amount of fees depending on the Asset Under Management or AUM. The asset management company stocks are the shares issued by the companies managing the mutual funds.
List of AMC Stocks in India
Below mention are the listed Asset Management Companies (AMC) in India:
HDFC Asset Management Company Limited
Nippon Life India Asset Management Limited
Aditya Birla Sun Life AMC Limited
UTI Asset Management Company Limited
Shriram Asset Management Company Limited
Company
Current Market Price (INR)
Market Capitalisation (In Crore)
52-Week High
52-Week Low
HDFC Asset Management Company Limited
3,865
82,583
4,864
3,255
Nippon Life India Asset Management Limited
638
40,378
816
430
Aditya Birla Sun Life AMC Limited
738
21,296
912
450
UTI Asset Management Company Limited
1,186
15,231
1,408
802
Shriram Asset Management Company Limited
485
631
697
226
(As of 16th January 2025)
Overview of AMC Stocks
1. HDFC Asset Management Company Limited
The HDFC Asset Management Company Limited was incorporated in 1999 as a joint venture between HDFC Limited and Standard Life Investments Limited. In 2003, it acquired Zurich Mutual Fund and Morgan Stanley Mutual Fund in 2014. The company launched its IPO in 2018 and became a publicly listed company.
Key Highlights:
As of 30th September 2024, the company manages an AUM of more than ₹7.5 Lakh crores.
The company has more than 90,000 distributors empanelled with them.
It has 255 branches and more than 1,597 employees.
The company’s headquarters is situated in Mumbai.
Know the Returns:
1Y Return (%)
3Y Return (%)
5Y Return (%)
16.37%
64.64%
26.95%
(As of 16th January 2025)
2. Nippon Life India Asset Management Limited
The company was incorporated in 1995 under the sponsorship of Reliance Capital Limited. Initially, it was known as Reliance Mutual Fund. Nippon Life Insurance acquired a 26% stake in Reliance Mutual Fund, and by this, it entered into the asset management sector. In 2017, the company got itself listed on the Indian Stock Exchange and rebranded itself as Reliance Nippon Life Asset Management Limited. After that, in 2019, Nippon Life Insurance acquired 75% of the total equity in the company and renamed it Nippon Life India Asset Management Company.
Key Highlights:
The company’s AUM is around 5.49 lakh crores.
The total number of folios managed by the company is 287.77 lakhs.
As of 31st March 2024, the company has 263 branch offices across India.
The company’s headquarters is situated in Mumbai.
Know the Returns:
1Y Return (%)
3Y Return (%)
5Y Return (%)
34.02%
83.13%
95.01%
(As of 16th January 2025)
3. Aditya Birla Sun Life AMC Limited
Aditya Birla Sunlife Mutual Fund was incorporated in 1994, and it was a joint venture between Aditya Birla Group and Sun Life Financial Incorporation. In 2017, the company changed its name to Aditya Birla Sun Life Asset Management Company. The company launched an IPO in 2021 and got itself listed on the Indian Stock Exchange.
Key Highlights
The company has more than 1.02 crore folios managed under its brand.
The company has a presence across 300 locations.
The total amount of assets managed by the company is around 4 Lakh crores.
The company’s headquarters is situated in Mumbai.
Know the Returns:
1Y Return (%)
3Y Return (%)
5Y Return (%)
52.38%
30.60%
7.48%
(As of 16th January 2025)
4. UTI Asset Management Company Limited:
UTI Mutual Fund is India’s oldest mutual fund and played an important role in channeling the savings of the Indian people into equity investments. Unit Trust of India was established in 1963, and later, in 2003, after the restructuring of Unit Trust of India, UTI Mutual Fund was made a separate entity and registered with the Securities and Exchange Board of India. The company launched its IPO in 2020, and with this, it became a publicly listed company.
Key Highlights
The total number of folios managed by the company is 1.22 crore.
The company has a presence across 210 locations.
The total amount of assets managed by the company is around 2.83 Lakh crores.
The company’s headquarters is situated in Mumbai.
Know the Returns:
1Y Return (%)
3Y Return (%)
5Y Return (%)
40.59%
15.90%
150.59%
(As of 16th January 2025)
5. Shriram Asset Management Company Limited
Shriram Asset Management Company was incorporated in 1994 with the aim of managing investor funds. It is a part of the Shriram Group, which was incorporated in 1974. The company launched its first mutual fund scheme in 1995 and is currently focusing on improving its investment platform using innovative technologies.
Key Highlights
The company is currently managing an AUM of around 876 crores.
The company’s headquarters is situated in Mumbai.
Know the Returns:
1Y Return (%)
3Y Return (%)
5Y Return (%)
43.47%
388.40%
402.92%
(As of 16th January 2025)
Key Performance Indicators (KPIs)
Company
Operating Profit Margin (%)
Net Profit Margin (%)
Return on Equity (%)
ROCE (%)
Current Ratio
HDFC Asset Management Company Limited
96.12
75.17
27.45
33.99
29.79
Nippon Life India Asset Management Limited
82.68
67.32
27.87
32.75
17.32
Aditya Birla Sun Life AMC Limited
74.91
57.66
24.62
30.73
16.04
UTI Asset Management Company Limited
57.46
46.17
17.44
19.69
17.83
Shriram Asset Management Company Limited
-70.08
-86.37
-8.84
-7.08
48.15
(All of the above data is from the year ended March 2025)
Advantages of Investing in the Finance Asset Management Sector Stocks
The advantages of investing in Finance Asset Management Companies stocks are as follows:
Revenue Source: Asset management companies’ revenue source is very steady as they charge fees from their customers based on the assets they manage.
Growth potential: With the growing penetration of the Indian mutual fund industry, asset management companies have high growth potential. With an increasing AUM, the companies are expected to perform well in the future.
Low capital requirement: Asset management companies require less capital expenditure than other industries, which eventually increases their profit margin.
Diversification: One can diversify their portfolio by investing in asset management companies and protecting their portfolio from stock-specific or sector-specific risks.
Risk Involved while Investing in Finance Asset Management Sector Stocks
There are certain risks involved while investing in asset management companies, a few of which are mentioned below:
Competition: The finance asset management sector is highly competitive since there are established players in this sector. Companies with strong brand recognition tend to have a competitive advantage over others.
Regulation: In India, the mutual industry is regulated by the Securities and Exchange Board of India, and any new regulation introduced by the regulatory authority could impact the profit of these companies.
Economic Downturn: Asset management companies are dependent upon the investments made by the investor; any economic slowdown will reduce the company’s AUM and directly impact its revenues.
Key Person Risk: The performance of asset management companies depends on the fund manager who manages the AUM. If their investment approach generates significant profits for the investor, then other companies might try to convince that particular fund manager to work for them.
Future of Asset Management Sector Stocks
This sector will benefit from the rise of the Mutual Fund Industry. The industry has a significant growth potential in the long run due to the constant rise in the assets under management. With the rise in SIP amounts and retail participation, the mutual fund industry has grown at a compounded annual growth rate of more than 17.5% in the past five years. As of November 2024, the AUM of the mutual fund industry stood around ₹68 lakh crores and is expected to cross ₹100 lakh crores in the next five years. Due to the reasons mentioned above, the companies engaged in this sector are likely to perform well in the coming years as they are the direct beneficiaries of it.
Conclusion
On a concluding note, financial asset management companies have high growth potential in the long run, especially during the bullish market trends. Their revenue sources are based on fee structures and will increase with the increasing participation of investors. However, it is crucial to analyze the investment opportunities in this sector as asset management companies work in a highly regulated environment, and the industry is highly competitive. One can diversify its investment portfolio by including a few stocks of listed asset management companies (AMC). However, before making any investment decision, you must consult your investment advisor.
You can open a free Demat account with Pocketful to start investing in finance asset management companies.
Frequently Asked Questions (FAQs)
What is AMC?
AMC stands for Asset Management Company. AMCs are financial institutions that manage and invest funds on their client’s behalf through pooled investments such as mutual funds, ETFs or other financial instruments.
Does AMC charge fees from investors?
Yes.
Who regulates AMCs?
Securities & Exchange Board of India.
How many registered AMCs are there in India?
As of December 2023, there are 44 registered AMCs.
What is Assets Under Management (AUM)?
It is the total value of the investments managed by the AMC.
Which are the top asset management companies in India?
Based on the market capitalization, the top asset management companies in India are HDFC Asset Management Company, Nippon Life India Asset Management Company, Aditya Birla Sun Life Asset Management Company, UTI Asset Management Company, and Shriram Asset Management Company.
What is the major revenue source of asset management companies?
A major source of revenue for asset management companies is the fees they charge from their investors based on the assets managed by them.
What are the factors which can impact the performance of an asset management company?
The major factors that can influence the performance of asset management companies include the fees they charge, their investment strategies, the market dynamics and the regulations.
How do you invest in the stocks of asset management companies?
One can easily invest in an asset management company’s stock by opening a demat account with a broker. You can open an online free demat account with Pocketful and begin your investment journey.
A Demat account is necessary to participate in the stock market in India. Although many brokers in the market offer Demat account services, you should select one based on your needs.
In this blog, we will give you an overview of the best Demat account in India for 2025, along with the top three recommendations for traders and investors.
What is a Demat Account?
An investor can keep financial assets, including stocks, mutual funds, ETFs, bonds, and more, in an electronic demat account. Before 1996, securities were exchanged in physical certificates, which had several dangers, including damage from forgeries and theft. Demat accounts were created to remove these risks. If you wish to trade on the Indian Stock Market, you must have a Demat Account.
What to Look for in a Demat Account App?
The key considerations for selecting the best Demat Account:-
Brokerage – Brokers typically charge a commission as a fee for using their platform to execute trades. You should choose the broker for opening a Demat account that offers you the lowest brokerage.
Account Maintenance Fees – Customers are charged fees for maintaining their Demat accounts by the broker. Since these yearly maintenance charges differ from broker to broker, it is essential to consider brokers who offer lower annual maintenance fees.
Account Opening Fees – A one-time fee is charged by some brokers while opening a demat account with them. However, the majority of brokers are offering zero account opening fees.
Margin Interest – Brokers lend money to their clients and charge interest on it at a certain rate; therefore, if you wish to opt for a margin trading facility, then you must consider the broker who charges a minimum interest rate on this facility.
Research Tools – There are various types of research tools offered by brokers; therefore, one must choose a broker who offers the most advanced trading tools.
Customer Support – One of the most important things to consider when opening a Dement account is customer service. Customer service is crucial because you want any issue you encounter when managing a Demat account to be fixed as soon as possible.
Overview of the Top 10+ Demat Accounts Apps for Traders and Investors
An overview of 10 + Best Demat Accounts for traders and investors is given below:-
1. Pocketful – Free Demat Account App
Pocketful is a new-age discount broking firm offering a wide range of investment options such as equity, commodity, derivatives, etc. Pocketful was launched in 2024 and is backed by Pace Financial Group. Pocketful is developed by professionals with more than 27 years of experience, which ensures enhanced user experience. Pocketful is different from other discount brokers as it offers one of the best trading platforms and does not charge any fees for equity delivery-based trades, account opening, or yearly maintenance fees. Therefore, it is the best option for both traders and investors.
Key Features
Pocketful provides a free trading platform since there are no brokerage on equity delivery trades, zero account opening fees and zero annual maintenance fees for the first year.
An online account can be opened with Pocketful within five minutes.
You can create your trading strategies using free Pocketful APIs.
Best For: Because of its user-friendly design, zero brokerage on equity delivery transactions, and no annual maintenance fees for the first year, Pocketful is the best broker for traders and investors. Additionally, it offers advanced trading tools to analyze the market. Therefore, one can consider opening a Demat account with Pocketful.
2. Zerodha
Zerodha is one of the major players in the Indian stock broking industry. It was established in 2010 by the Kamath Brothers and offers a distinctive trading platform focusing on cutting-edge technology. It introduced a new pricing structure in the broking industry, which was known as flat brokerage for trading.
Key Features
Zerodha is renowned for its user-friendly trading platform.
It has a dedicated customer service team that assists its clients in resolving their queries.
Varsity is a free education platform offered by Zerodha to enhance the knowledge of their client.
Best For: Investors who want to trade in the stock market with the broker that offers the lowest brokerage can opt for this platform.
3. Angel One
Angel One is one of India’s top full-service brokers. It was established in 1996. It offers trading and investing in a variety of assets such as equity, commodity, derivatives, etc., and investment advisory services. Their cutting-edge software platform prioritizes the requirements and desires of its customers.
Key Features
The main advantage of opening a demat account with Angel One is their customer-focused approach.
Advanced trading tools are available in Angel One’s application.
The company has a strong offline presence across the nation.
Best For: Angel One is suitable for traders who prefer offline broking services.
4. ICICI Direct Securities
One of the top stockbrokers in India is ICICI Direct Securities. One of the biggest banks in India’s private sector, ICICI Bank, owns ICICI Direct as a subsidiary. It offers a three-in-one account, which combines savings, trading and a Demat account through which an investor can effortlessly move funds from their savings account to their trading account. They offer a large variety of investment products that are tailored to meet the customers’ requirements.
Key Features
Through its local offices, the company maintains a strong national presence, assisting its investors with any questions they may have.
ICICI Direct also provides its clients with consultancy and research services.
Additionally, it provides its investors with individual or customized wealth management solutions.
Best For: ICICI Direct Securities is a good option for investors who need assistance from local branch offices.
5. Kotak Securities Limited
Kotak Securities is a division of Kotak Mahindra Bank, one of the largest private sector banks in India. It makes it simple for their customers to link their bank account to their trading and demat accounts. Kotak Securities provides its investors with a variety of investment products, such as equities, commodities, and derivatives. Kotak Securities’ desktop-focused Neo Web and the mobile application Kotak Neo both provide real-time market data to traders and investors.
Key Features
Apart from trading in equity and commodities, it also offers a wide range of investment options, such as mutual funds.
Kotak Securities educates investors through various educational initiatives.
Because Kotak Bank supports the company, it enjoys a great reputation as a brand.
Best For: Kotak Securities is a good choice for investors who want to enhance their stock market knowledge through their online tutorials.
6. Upstox
Upstox offers a modern trading platform and technical tools that help investors predict the trend of a commodity or a stock price. Additionally, they provide an option chain with a strategy mode that allows you to formulate and carry out your trading plans.
Key Features
The mobile application offered by Upstox makes it simple for a beginner to start trading.
You can create several watchlists on the platform and add equities, commodities, etc., for intraday trading.
There are no annual maintenance charges payable by the investor while keeping an Upstox account.
Best For: Upstox is suitable for traders who wish to utilize technical analysis as a tool for intraday and swing trading.
7. 5Paisa
One of the leading discount brokers in India, 5Paisa offers a variety of services, including commodity and equities trading. It was founded in 2016 with the main goal of providing broking services at low prices. 5Paisa is an AMFI-recognized distributor of mutual funds.
Key Features
They offer user-friendly web-based and mobile-based trading platforms to investors that offer them a seamless trading experience.
5Paisa offers investment in mutual funds through its platform.
Their FnO360 platform offers advanced tools so that investors can make informed decisions.
Best For: 5Paisa is an option for those who want to learn about the stock market through interactive workshops.
8. Sharekhan
Established in 2000, Sharekhan was among the first broking firms in India to provide online trading services to regular clients. By opening franchises around the nation, it expands its business at an exponential rate. It was purchased by the French investment banking company BNP Paribas later in 2016 and was then sold to Mirae Asset Financial Group in 2024.
Key Features
They provide a smooth mobile application with advanced trading tools.
Sharekhan offers an advanced training program for its investors through its online courses, popularly known as the Sharekhan Classroom.
It has a dedicated customer support team that addresses its customers’ queries.
Best For: For people who want to learn about technical and fundamental analysis, Sharekhan is the ideal choice.
9. Motilal Oswal Financial Services Limited
Motilal was founded in 1987 and is regarded as a major participant in the Indian broking industry. It offers advisory services, portfolio management services and investment in various asset classes. With more than 30 years of experience and multiple awards in recent years, they offer research reports in addition to advanced trading tools through their website and their mobile application named RISE.
Key Features
Motilal Oswal Financial Services Limited provides its clients with customized financial solutions.
Their mobile application is one of the best in the industry due to its user-friendly interface.
Loans against securities are also offered by the company.
Best For: Ideal for investors who wish to have access to a variety of specialized financial products in one location, including portfolio management services.
10. SBI Securities
It was incorporated in the year 2006, and initially, it was known as SBICap Securities Limited. It is a wholly-owned subsidiary of the State Bank of India, which is India’s largest public-sector bank. SBI Securities is known for its extensive branch network and trust among investors due to government support for SBI. Along with equity and commodity trading services, it also offers research and advisory services.
Key Features
They have personalized relationship managers for their high-net-worth individual clients.
SBI Securities can increase the purchasing power of existing customers by offering them margin trading facilities for intraday traders.
Best For: This platform is suitable for both new and experienced investors as it offers comprehensive services. However, the fees charged by them are comparatively higher than those of others.
11. Axis Direct
Axis Direct was founded in 2011 and is a division of Axis Securities Limited, which is a subsidiary of Axis Bank. The company used innovative technology and created the Axis Direct platform, which is now among the top trading platforms in the Indian broking industry. The customers of Axis Bank can easily link their bank account to their demat account. The company’s headquarters is situated in Mumbai.
Key Features
It offers advanced trading and investing platforms to its customers.
The Axis Direct provides regular, in-depth fundamental research reports on different stocks, sectors, and commodities.
Margin funding is also an additional feature provided by Axis Direct to their investors.
Best For: Investors looking to use the margin trading facilities provided by the broker can consider Axis Direct as an option.
12. IIFL
In 1985, IIFL was established as a division of the India Infoline Group. Originally founded as an advisory firm, its primary focus was on research and related activities. In 2005, it changed its name to India Infoline and went public on the Indian Stock Exchange. The company offers an advanced trading platform and ensures that its investors make wise investment decisions through its research reports.
Key Features
IIFL offers research and advisory services to its customers.
It also offers a user-friendly trading platform.
Various free educational sessions are also provided by IIFL to their customers to enhance their knowledge.
Best For: Investors may choose to open a demat account with IIFL if they would like research and advisory services in addition to quick trade execution.
13. Edelweiss Broking
The Edelweiss Group chose to expand their business in 2008, and decided to enter into the broking service industry, and established Edelweiss Broking Limited. From 2010 to 2015, the company focused on research and advisory services. Along with this, they offered their clients a cutting-edge investing platform. The company began to diversify its product portfolio and included mutual funds and portfolio management services in 2015.
Key Features
It offers algorithmic trading services to its customers.
They also suggest actively managed funds to their customers based on market conditions.
Daily market updates are also provided by Edelweiss to their investors so that they stay updated about the market conditions.
Best For: Edelweiss broking is suitable for those investors who are looking for a comprehensive array of services, such as advisory, trading etc., in one place.
14. Groww
It was incorporated in 2016 by the four Flipkart employees. Over time, this platform has grown in popularity among beginners in trading because of its easy-to-use interface.
Key Features
It charges minimal fees from its customers.
They provide investment in stocks, ETFs, mutual funds, etc., along with credit and bill payment services.
Best For: It is suitable for investors who wish to have access to all their investments in one place or at a single application.
15. Paytm Money
When Paytm Money was launched in 2017, it started operations as a direct mutual fund investment platform. One97 Communications Limited, the parent firm of Paytm, gained popularity right away among individual investors looking to cut costs when investing in mutual funds. In 2019, the company decided to provide low-cost stock trading services. The company’s headquarters is situated in Bengaluru.
Key Features
Paytm offers a user-friendly application to provide their investors with a hassle-free trading experience.
It also offers access to direct mutual funds through which a customer can save costs.
It offers various calculators, such as SIP, lumpsum, etc., on its platform.
Best For: It is suitable for investors who are looking for platforms that offer trading facilities at a lower cost and fulfill their investment needs.
The 3 recommended brokers for the traders are as follows:-
Zerodha: Due to their cost-effectiveness, investors adore Zerodha, which is regarded as the biggest broker in India with millions of customers, affordable pricing, and flat brokerage costs. Sensibull for sophisticated options trading, Streak for algo trading, KITE for web and mobile-based trading, and a tiny case for theme-based investment are some of its intelligent trading tools. Their trading tools make it easy to place orders, and Varsity, their educational program, is a special selling point.
Pocketful: Another up-and-coming stock broking company that provides a variety of investing possibilities and has no equity delivery fees. The application is simple to use and navigate. The platform, which aims to make investing easier, is a relatively new fintech platform in India. Its goal is to offer a smooth trading experience. The Goel brothers, Rishabh and Sarvam, founded it. The Goel Brothers are differentiating Pocketful from other bargain brokers by using their family’s experience from the Pace Stock Broking company, which has been involved in financial services for more than 30 years.
Upstox: In addition to offering slick trading interfaces, Upstox charges trading costs that are comparable to Zerodha’s flat rates. It has sophisticated charting capabilities, and Upstox has a special feature called Tick-by-Tick Engine that gives retail traders information regarding buy and sell orders. Previously, this capability was restricted to institutional and wealthy individual clients.
Top 3 Recommendations for Investors
The 3 recommended brokers for the investors are as follows:-
Pocketful: The ideal alternative for those who want to make long-term investments is Pocketful. This finance platform is modern. There are no annual maintenance fees, account opening fees, or delivery fees with Pocketful. Their platform is built on state-of-the-art technology created by experts with over 27 years of experience. Through their site, one can invest in a wide range of assets, improving the user experience.
Kotak Securities: One of the biggest private sector banks in India, Kotak Mahindra Bank, owns Kotak Securities as a subsidiary. Additionally, it provides its clients with bank accounts and integrated demat trading for simple money transfers. Kotak Securities offers a vast array of investing options, such as mutual funds, stocks, derivatives, fixed-income products, and more. It provides cutting-edge trading platforms like Kotak Stock Trader, a web-based trading platform, and KEAT Pro X, a desktop-based trading platform that gives active traders access to real-time market data. It also offers sophisticated charting tools.
Motilal Oswal Financial Services Limited: Founded in 1987, it is one of the top broking organizations in India, providing a wide range of investment alternatives, portfolio management services, and consulting services. Their advanced trading systems include. It provides the desktop trading terminal in addition to the investor and trader apps. Motilal Oswal’s research and advising services are regarded as some of the best in the business. It provides customized consulting services for its HNI clientele and has thirty years of research knowledge. One of the best PMS services available in the market is their portfolio management platform.
Cost Efficient – A good demat account must be cost-efficient, which means the brokerage and other kinds of fees levied by the broker are less.
Ease of Tracking and Managing Investment – As securities are held in electronic form, the tracking and managing of investments is efficient and hassle-free.
Enhanced Trading Experience with Advanced Platforms – The trading platform offered by the broker must be equipped with advanced trading tools to enhance the trading experience of a trader.
Ease of Account Opening – The process of opening an account with a broker should be easy and convenient. Nowadays, a demat account can be opened in just 24 hours.
Free Research Tools—Many brokers provide demat accounts for free. However, their trading and research tools are paid; for this reason, one should consider opening a demat account with a broker that provides free research resources.
Reliability – The broker with whom you open your demat account must be credible and reliable.
Transparent Pricing – The pricing offered by the broker must be transparent. There must be no hidden charges.
Importance of Demat Account in Trading and Investing
There are various of having demat accounts, a few of which are mentioned below-
Holding Securities – A Demat Account allows you to hold securities electronically.
Transactions – If you want to sell or buy any securities, a demat account makes the process simpler.
Nomination – An investor can nominate their close ones who will inherit the securities held in their demat account in case of the holder’s unfortunate death.
No Minimum Balance – You are not required to have any minimum balance in your demat account.
Corporate Actions – The demat account manages all the corporate actions like right issues, bonus shares, etc.
How to choose the right Demat Account for Long Term Investment
There are various factors one should consider before choosing the right demat account, a few of which are mentioned below:-
Investment Objective: Selecting a platform that provides sophisticated trading tools and cheap transaction fees is essential if you are a short-term trader. However, you should search for a broker that offers cheap annual maintenance fees if you are a long-term investor.
User-friendly interface: Before selecting a broker, you should confirm that the platform they provide is user-friendly and straightforward to use so that you can trade with ease.
Research Services: If you are new to investing, then you must opt for a broker which offers you valuable research reports and research calls that can make your investments.
Customer support: The customer support offered by the broker must be taken into consideration as Whenever you face any issues the queries must be resolved on an immediate basis.
Hidden charges: Various brokers in the industry charge some kind of hidden fees from their customers; therefore, before choosing a broker, one must conduct proper research about the hidden charges.
Trading Platform: Before choosing a broker, one must consider a trading platform which offers all the key features required by a trader or investor.
In conclusion, you should evaluate the services, fees, customer service, etc., that your broker offers if you intend to open a demat account. The investor’s investment goal also influences the broker’s choice. A Demat account, which provides the lowest brokerage and cutting-edge trading platforms, is something you should think about if you are a short-term investor. Choose a broker that offers the lowest or no annual maintenance fees, though, if you are a long-term investor. With its cutting-edge trading tools, lowest brokerage, lowest annual maintenance fees, and other features, Pocketful provides you with a demat and trading account. By clicking the link, you can open a demat account with us.
Frequently Asked Questions (FAQs)
Which Demat Account is Best for Beginners?
Depending on their investing goal, beginners should select a Demat account. When searching for short-term trading opportunities, a Demat account with the lowest brokerage is a requirement, but when seeking long-term investment, a Demat account with the lowest yearly maintenance expenses is a must. We at Pocketful provide you with the most affordable brokerage and yearly maintenance fees.
Is there a difference between a demat account and a trading account?
Indeed, the trading account allows you to buy or sell assets, whereas the Demat account just keeps them in electronic form.
Can I open a trading and demat account with the same broker?
Yes, you can open both trading and demat accounts with any broker that offers integrated account services.
Who can open a trading and demat account?
Any resident or non-resident person, corporate entity, or minor may open a Demat account; however, the legal guardian must be the only person able to manage the minor’s account.
What is the minimum amount required to open a demat account?
To start a demat account, you simply need to pay the opening fees, which are typically waived by brokers. There is no minimum amount needed.
Commodity trading is a dynamic sector that requires speed, reliability, and accuracy; hence, before starting commodity trading, choosing the best commodity trading platforms is essential. A new trader who wishes to start their commodity trading journey is generally confused about which trading platform is suitable for them.
To clear your confusion, Pocketful is here with another blog explaining the key features of the top 10 commodities platforms in India.
What Makes a Good Online Commodity Trading Platform?
A commodity trading platform is a place where sellers and buyers come together to buy and sell different commodities such as crude oil, gold, etc. In India, there are various brokers offering trading services to investors, but choosing the best trading platform among them requires knowledge about their key features.
A good commodity trading platform plays an important role in commodity trading avenues; the major factors that make the best commodity trading brokers in India are as follows:
User Interface: The interface of the commodity trading app provided by the broker must be user-friendly and easy to use.
Reliability: The real-time data provided by the commodity trading platforms must be accurate and reliable
Analytical Tools: The platform which you choose to trade in commodities should be equipped with advanced analytical tools.
Support: The support system of the commodity trading platforms must be available 24/7 to resolve investors’ queries.
Integrated 3-in-1 account (banking, trading, demat), comprehensive research
Kotak Securities Limited
₹0–₹499
₹20 per executed order for delivery trades
₹0–₹600 per year
Trusted brand, extensive educational support
Motilal Oswal Financial Services Limited
₹0
0.02% for commodity futures; ₹200 per lot for options
₹400 per year
Portfolio management services, in-depth research reports
IIFL
₹0
0.25% of transaction value for commodity futures; ₹25 per lot for options
₹250 per year
Robust research and advisory services, user-friendly platform
5Paisa
₹0
₹20 per executed order
₹300 per year
Flat-fee trading across segments, cost-effective solutions
Sharekhan
₹0
₹20 per order
₹400 per year
Comprehensive training programs, powerful trading terminal
Disclaimer:This content is for informational purposes only and does not constitute financial advice. Platform features and charges may change—please verify details directly with the service providers before making any decisions.
1. Pocketful – Free Commodity Trading Apps
It is an emerging stock broking firm offering investment opportunities in various asset classes at low fees. The mobile app is easy to use and has a user-friendly interface. Pocketful was launched in 2024 and is a subsidiary of Pace Stock Broking Services. Pocketful has been developed by professionals with more than 27 years of experience. Pocketful is different from other discount brokers as it offers zero delivery and account opening fees, making it the best option for both traders and investors.
Key Features:
Pocketful offers a free commodity trading platform, as there are no account opening fees.
The account opening process is completely online and can be completed without any paperwork.
Pocketful offers APIs to code your trading strategy and automate the trading process.
Best For: The Pocketful platform is suitable for all kinds of investors and traders as it provides a user-friendly interface offering zero brokerage on equity delivery and zero annual maintenance charges for the first year. It also provides advanced trading tools to analyze the market. Hence, one can consider opening a Demat account with Pocketful.
2. Angel One
Angel One is among the leading full-time brokers in India. The company was incorporated in 1996, offering a wide range of services, ranging from stock to commodity trading. It also offers investment advisory services. Their innovative platform focuses on customer needs and wants.
Key Features:
Good customer support is considered the key benefit of opening a demat account with Angel One.
It also provides technical analysis tools in their app.
Angel One has a strong offline presence across the nation.
Best For: This platform is appropriate for individuals who rely on a broker for investing advice.
3. Zerodha
Zerodha is a prominent player in the Indian Stock broking industry. It offers trading facilities in commodity and other investment options. It was founded by the Kamath Brothers in 2010 with a focus on using advanced technology to develop a unique trading platform. Zerodha introduced a new pricing scheme, which was a flat brokerage for trading.
Key Features:
Zerodha is known for its cutting-edge technology and easy-to-use trading interface.
They also have a dedicated customer support team, which helps the investor to resolve their queries.
Zerodha offers a platform known as Varsity, which is an open and free market education platform.
Best For: This platform is suitable for investors who wish to trade in a stock market, with the broker offering low brokerage fees.
4. Upstox
This platform offers a user-friendly trading platform. They have advanced technical tools that help an investor identify the trend of a commodity and execute a trade based on it. They also offer an option chain with a strategy mode in which you can build your strategy and execute the trade.
Key Features:
Through the Upstock app, one can easily execute the trades.
On the platform, you can make multiple watchlists and keep track of various commodities.
The company charges zero AMC to maintain an account with them.
Best For: Traders who want to use technical analysis as a tool to take intraday and swing trades.
5. ICICI Direct Securities
ICICI Direct Securities is one of India’s leading stockbrokers and is a subsidiary of ICICI Bank, a major player in India’s private-sector bank. ICICI Direct offers a three-in-one account, which is a combination of savings, trading, and Demat accounts. Through their three-in-one account, an investor can easily transfer money from their savings account to their trading account.
Key Features:
The company has a strong presence across the nation through its local offices, which helps its investors resolve their queries quickly.
The company offers research and advisory services to their customers.
It also offers personalized wealth management solutions to its investors.
Best For: Investors who wish to have support through local branch offices can opt for ICICI Direct Securities.
6. Kotak Securities Limited
Kotak Securities is a subsidiary of one of India’s biggest private sector banks called Kotak Mahindra Bank. Kotak Securities offers a wide range of products to its investors, including stocks, commodities, derivatives, etc. The web-friendly Kotak Stock Trader or the desktop-centric KEAT Pro X, for example, both cater to active traders with live data from the markets.
Key Features:
In addition to commodity trading, Kotak Securities provides a variety of investment opportunities, including stocks, mutual funds, etc.
Kotak Securities runs various programs to educate investors.
The company has a strong brand reputation as it is backed by Kotak Bank.
Best For: Kotak Securities is suitable for investors who wish to access the learning material and tutorials about the stock market.
7. Motilal Oswal Financial Services Limited
Motilal is considered a prominent player in the Indian broking industry and was established in 1987. It offers various investment options, portfolio management services, advisory services, etc. They provide modern trading platforms, including a desktop terminal and a mobile app. The company has over 30 years of experience and provides research and advisory services.
Key Features:
Motilal Oswal Financial Services Limited offers customized financial solutions to its customers.
Motilal Oswal’s trading app is considered some of the best in the industry due to its user-friendly interface.
Loan against securities facility is offered by Motilal, allowing an investor to pledge their securities and get the loan.
Best For: Suitable for an investor who wants other customized financial products in one place such as portfolio management services.
8. IIFL
IIFL was founded in 1985 as a part of the India Infoline Group. Initially, it was established as an advisory firm and focused on research and its related services. It was listed on the Indian Stock Exchange in the year 2005 and rebranded itself as India Infoline. Through their research reports, the company ensures that their investors make sound investment decisions, and they also offer an advanced commodity trading platform
Key Features:
The company offers research and advisory services to their customers.
The company offers a user-friendly commodity trading platform.
IIFL provides various free educational sessions to help its clients enhance their knowledge.
Best For: Investors who want research and advisory services along with a good trading platform.
9. 5Paisa
5Paisa is one of the top discount brokers in India, providing commodity trading and other services. It was established in 2016 with the primary objective of offering affordable financial services. They are also acknowledged by AMFI as a mutual fund distributor.
Key Features:
They offer a user-friendly web platform and a mobile trading platform to investors, offering them a seamless trading experience.
5Paisa offers investment in mutual funds through its platform.
Their FnO 360 platform offers advanced tools so that investors can make informed trading decisions.
Best For: Investors looking to learn about the stock market through interactive sessions can opt for 5Paisa.
10. Sharekhan:
Sharekhan was founded in 2000, and it is one of the first broking firms in India to offer retail investors access to online trading platforms. It exponentially grows its business by offering franchisees throughout the country. It is known for its offline presence and customer support.
Key Features:
They offer a desktop-based trading terminal known as Trade Tiger, which is equipped with advanced trading tools.
Sharekhan offers an advanced training programme for its investors through its online courses, which is known as Sharekhan Classroom.
It has a dedicated customer support team to address its customers’ queries.
Best For: Sharekhan is best suited for those who wish to learn something new about technical and fundamental analysis.
How to Choose the Right Commodity Trading Platform App?
There are various parameters that one should consider before choosing an online commodity trading platform; a few of such key features are mentioned below:
Understanding Needs: Make sure the platform that you are opting for meets all of your needs.
User Interface: The user interface of the application must be easy to understand and reliable to enhance the user experience.
Technical Tools: There are various types of advanced trading tools that traders require to trade efficiently in the commodity market.
Execution: The commodity trading platform must execute orders instantly and efficiently.
Charges: The trading platform that you are opting for must offer its trade execution services at a low cost.
Hidden Charges: There must be no hidden charges in the commodity trading platform that you are opting for.
To sum up, in this blog, we have given you an overview of the best commodity trading platforms in India. Trading in commodities gives you a chance to gain significant profit with knowledge and expertise. Although many brokers are offering online commodity trading platforms, it is advised that you evaluate brokers based on their fees, the trading platform, etc., offered by them and then select the one suitable for you.
Pocketful also offers you an online commodity trading platform with no account opening charges, and it is among the best commodity trading apps in India.
Have you ever wanted to invest in gold but felt daunted by the idea of storing it in physical form? Enter Paper Gold—a modern, hassle-free alternative for both traders looking to bet on short-term price moves and investors wishing to invest in gold in a secure manner. Be it for executing speculative trades or portfolio diversification; paper gold has become the preferred way to invest or trade in gold.
In this blog, we will describe paper gold, its different types and investing mechanisms in detail. We will also describe the benefits and limitations of investing in paper gold and compare the features of paper gold with those of physical gold.
What is Paper Gold?
Unlike traditional gold investments, paper gold is a financial instrument that allows investors to gain exposure to gold’s price movement without the burden of physical possession. These are instruments like ETFs, futures contracts, or options that track the gold price, existing purely in paper or digital form. While physical gold offers a tangible security, paper gold is highly liquid, mirrors pricing movement instantly and can be easily traded.
How Different Types of Paper Gold Work?
Now, we are going to discuss the types of paper gold available in the market and how they work. There are basically four main types of paper gold:
1. Gold ETFs
ETFs or exchange-traded funds are investment funds that invest in gold whose shares trade on the stock market. These funds aim to track the price movements of gold either through physical ownership of gold or through derivatives linked to gold. The share price of the gold ETF moves according to the price changes in physical gold and thus provides market participants with a way to invest or trade in gold. Moreover, investors with small investment amounts can invest in gold ETFs as they have a very low share price.
2. Gold Futures
Gold futures is a financial contract between a buyer and a seller where the buyer agrees to buy a specific amount of gold at a predetermined price on a future date. Buying a gold futures contract doesn’t mean you actually take immediate possession of the physical asset. Rather, a futures contract gives a buyer the right to purchase the precious metal at a future date at a price set today. Gold futures trade on MCX in India.
3. Digital Gold
Digital gold provides a virtual investment option for buying, selling, or holding gold without any physical ownership. One can buy electronically through an authorized online platform. The digital gold that you buy is backed by physical gold in safe custody and stored by the issuer. Your investment can be redeemed either in cash or gold, hence giving you the flexibility of transactions with no worry of storage or security.
4. Sovereign Gold Bond
SGB, a government-backed security issued by the Reserve Bank of India, represents ownership of gold. Instead of purchasing physical gold, investors buy these bonds with a fixed interest rate per annum. At the time of maturity, the bonds can be redeemed at a price based on the market price of gold. By investing in SGBs, one does not have to worry about storage and can take advantage of tax benefits and capital gains due to gold price appreciation.
Benefits of Investing in Paper Gold
The upsides of investing in paper gold are:
Liquidity – Paper gold, such as gold ETFs, can be bought and sold in seconds on stock exchanges during trading hours. Money can be withdrawn easily, unlike physical gold, where finding a buyer and seller can take days.
No risk of theft – Paper gold does not need any locker or insurance and hence has eliminated the risk of theft.
Affordability – With paper gold, one can begin investing in gold with small amounts of money.
Limitations of Investing in Paper Gold
The limitations of investing in paper gold are:
No tangible ownership – Paper gold doesn’t provide the comfort or utility of having the actual gold that gives a sense of ownership and can be worn as jewelry or displayed.
Default risk – Though such incidences would have been rare, there is still a possibility of default when the issuer of gold bonds or certificates goes bankrupt. There is no such risk when dealing with physical gold.
Price Volatility – Paper gold prices can fluctuate considerably due to volatile price movements in gold prices. Investors may suffer losses if paper gold instruments such as gold ETFs perform poorly in the short term.
Comparison: Paper Gold vs Physical Gold
Particulars
Paper Gold
Physical Gold
Definition
Paper Gold is a certificate or digital ownership of gold that proves that you have invested in gold.
Physical Gold is real gold. The kind of gold that you can melt and shape into jewelry.
Ownership
Investing in paper gold doesn’t give you physical possession of gold.
Investing in physical gold provides ownership.
3rd Party Management
Since the investor doesn’t hold the gold physically, he/she has to rely on intermediaries to store and manage it. This creates 3rd party risk or credit risk.
Since the investor has possession of gold, he/she doesn’t have to face any 3rd party risk.
Paper gold is best suited for investors who would rather have exposure to gold than take on the hassles of storing physical gold and bearing associated costs. Individuals wanting to diversify their investment portfolios can also consider investing in paper gold. Moreover, people with a small capital to invest would also benefit, as paper gold allows you to invest small amounts.
Investors can invest in SGBs as they pay a consistent stream of interest income and are eligible for capital gain exemption upon maturity. This is likely not to appeal to traditional investors, though, who might want a sense of ownership of gold and want to own gold in physical form.
How to Invest in Paper Gold?
1. Gold ETFs: To invest in Gold ETFs, open a Demat and trading account with a stockbroker, search for gold ETFs on the stock exchange, and buy the required number of units.
2.Sovereign Gold Bonds: SGBs can be bought from banks and post offices or through online platforms.
3. Gold Mutual Funds: Investing in Gold Mutual Funds can be done through asset management companies or brokers. These funds are invested directly in gold and other gold derivative instruments.
Conclusion
Paper gold is a way for investors to realize the benefits of investing in gold without the drawbacks of physical ownership. Paper gold can be in the form of ETFs, SGBs, gold futures, etc. Gold ETFs and gold futures are quite liquid, allowing investors an easy and quick way to invest in gold. SGBs provide a consistent income stream and tax exemptions. These factors make it an attractive investment proposition to modern investors. But like every other financial product, this one also has its disadvantages as many consider holding gold in physical form auspicious or for making jewelry. The choice between paper gold and physical gold will ultimately depend on your investment goals and risk profile. It is advised to consult a financial advisor before investing.
Frequently Asked Questions (FAQs)
What is paper gold?
Paper gold refers to financial instruments like gold ETFs, gold futures, and sovereign gold bonds that represent gold ownership without holding the metal in physical form. It offers exposure to gold’s price movements in a more convenient form.
What are the benefits of investing in paper gold?
Advantages of investing in paper gold include liquidity, relative affordability, absence of storage costs, etc.
What are some other risks involved with paper gold?
Risks of investing in paper gold are price volatility and third-party or default risk of the issuing entity.
Is paper gold a safe investment?
Paper gold is relatively safe if bought through trusted platforms. SGBs are also safe as they are backed by the government. Still, it has risks, such as price volatility and third-party default risks in some cases.
What is the lowest amount of investment in paper gold?
The minimum investment amount for paper gold differs from one issuer to another. There are some issuers who allow a minimum investment of Rs.1, while Sovereign Gold Bonds would require a much higher investment amount.
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