Commodity markets look very different today

Up until a few years ago, commodity trading was more or less an afterthought. Most traders didn’t bother with it because liquidity was thin relative to NSE F&O.

But that’s changed dramatically, thanks to the spectacular rally in gold and silver. If you look at gold and silver as a percentage of total MCX trading volumes today, the numbers are kind of crazy. A lot of this increase has come at the expense of other commodities like crude.

Our own market share at Zerodha took a hit during this period because we were one of the last brokers to offer the single trading ledger facility—where you can use the same funds in your account to trade across NSE, BSE, and MCX. But it’s been steadily inching back up.

Still, it’s wild how much volumes have grown. If you’d asked me a few years ago whether this would happen, I’d probably have said no.

Btw, we are working on a few live programs about commodities trading on Zerodha Varsity.