In reaction to our earlier pieces on futures trading and commodities trading , Get Ahead reader Satish Vijaykumar tells us how he lost money when he dabbled in Commodity Futures. T he day the Sensex crossed , I sold all my shares and decided to park my money elsewhere. Where must I invest?
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They too would be dependent on the stock market performance. In commodities trading, you actually trade in commodities like gold, wheat, crude oil, etc, not stocks. There are two things you must know.
First of all, when you buy a Futures contract, you don't pay the entire value of the contract, just a margin. The exchange will set a margin at, say, 3. Secondly, you make and lose money on a daily basis.
Here's an example that assumes I have bought that Gold Futures contract: Let's say the price of gold rises to Rs 73, per grams the next day. I guess you must have got the hang of it by now. After a week of poring over all the literature, I opened an account with the commodity broking firm.
They would invest my money based on the decisions taken by their research team. The first few days, life was great. I was making money. My losses began to mount daily: Can you blame me for getting jittery? I did not understand a thing the dealer said in her daily briefings.
I was going by the logic: That's when the bombshell fell.Gold Rise
The very next day I had lost another Rs 17, by trading in gold. Am I feeling cheated or sad that I lost such a huge amount? I guess I've reached the stage where feelings or emotions don't last too long.
They just vaporise after a while like the money I made and lost in day trading. But hey, I am wiser. So let me share some pearls of wisdom with you.
If it is your money, you take the call and do your own research. Remember, it is your money at stake. So, what did I do with the money I have left?
Good judgment or sheer foolishness? Only time will tell.
How I lost money in commodity trading
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I agree Listen I understood that U lost 47K However, think this way, If you had made entirly oppsoite decisons U would have made atleast 30K excluding Write us a letter.