Commodity Trading with SBI Securities - Explained

Published on Thursday, November 29, 2018 by Chittorgarh.com Team | Modified on Sunday, August 9, 2020

SBICAP Securities Ltd is based in Mumbai operates as a subsidiary of SBI Capital Markets Limited, provides securities broking services in India. The company offers services in the area of equity, derivatives, depository, online IPO, mutual fund distribution, online trading, and portfolio management.

They have a wide segment of clients including Banks, Financial Institutions, FIIs, Mutual Funds, corporate, High Networth Individuals, Non-Resident Indians and Retail domestic investors.

SSL is registered with the Securities Exchange Board of India. SBICAP Securities (SSL) provides share trading with eZ-trade@sbi. This can link all your three accounts i.e. Bank Account, Demat Account and Trading Account together.

They have 5 regional offices across India (Ahmedabad, Chennai, Hyderabad, Kolkata and New Delhi), 2 branch offices (Pune and Guwahati) and 5 subsidiaries - SBICAP Securities Limited, SBICAP Trustee Company Limited, SBICAP Ventures Limited, SBICAP (UK) Limited and SBICAP (Singapore) Limited.

SBI Trading Account Features

1. 3-in-1 trading experience (Demat, Savings; Online Trading A/C).
2. Low bandwidth option for anywhere access.
3. Instant Fund and Share transfer facility.
4. 24X7 access to the back office.

Does SBI Securities offer commodity trading?

No. SBI Securities doesn't offer commodities trading. You cannot use your SBI Securities 3-in-1 account to trade in commodities derivative like crude oil, gold, silver or copper at MCX.

How to invest in commodities at SBI?

While you cannot trade in commodity derivatives with SBI Securities, you have few ways to invest in some commodity products (mainly Gold) with SBI Securities. You can invest in commodity products where Exchange Traded Funds (ETFs) are available. In India Commodity ETFs are available for the only a couple of commodity products including gold.

Exchange-Traded Funds (ETFs)

Exchange-traded funds (ETFs) are securities that can be bought and sold during the day just like common stocks. ETF's assets like bonds, oil futures, gold bullion, foreign currency, etc. They can be traded through online brokers and traditional broker-dealers. The price of an ETF's shares will change throughout the day as they are bought and sold. They can be kept in the demat account for the long term. ETFs could have one or multiple commodities including includes agricultural goods, natural resources and precious metals.

Gold ETF

Gold ETFs provide you the way of buy gold without the necessity of taking physical delivery of it which means you won't own  any gold when you invest in a gold ETF. The units of these ETFs can be bought or sold at the stock exchange where it is listed on a real-time basis. 

When the price of gold moves up, the value of ETFs appreciates and vice versa. Gold ETFs offer great liquidity and a convenient way to invest in gold.

The advantage of investing in Gold ETF

1. Excellent way of diversification for your portfolio
2. Selling Gold ETF is way cheaper than selling physical Gold
3. It's risk-free because all transaction happens in electronic mode
4. You don't have to pay any making charges or delivery charges
5. They are highly liquid as they trade like shares
6. Quality of Gold is consistent so it's safe to invest

Popular brokers offering commodity trading

Hundreds of brokers offer commodity trading. The list includes both full-service brokers as well as discount brokers.

1. Full-Service Commodity Brokers

   Following is the list of 5 top full-service brokers offering commodity trading:

   • Sharekhan
   • Kotak Commodity Services Ltd
   • Angel Commodities Broking Ltd
   • Motilal Oswal Commodities Broker Pvt Ltd
   • Indiabulls Commodities Ltd

2. Discount Commodity Brokers

   Following is the list of 5 top discount brokers offering commodity trading:

   • Zerodha - Rs 20 Per Trade
   • RKSV - Rs 20 Per Trade
   • Trade Smart Online - Rs 15 Per Trade
   • SASOnline - Rs 999 / Month Unlimited Trading Plan
   • MyValueTrade - Rs 10 Per Trade