馃攳
How to trade Commodities in India | How to Trade Crude Oil | MCX Crude Oil Trading - YouTube
Channel: Learning Markets With Manish
[2]
When we brought the series on currency of USD/INR, etc.
[5]
there were many of our viewers
[7]
who were trading only equity trading,
[10]
they started trading in currency and
[13]
people slowly started practising that and
[16]
many things depend on fate.
[19]
So people started getting interested in that too.
[22]
People were requesting since many days for a video on commodities.
[25]
Because there is not much available on the internet on commodities
[29]
in terms of information.
[31]
So we are starting Commodities series,
[34]
3 videos will come on 3 proucts of MCX.
[36]
See, commodity trading in India, in which there is liquidity,
[39]
means in which trading can be done properly,
[42]
nifty-bank nifty everyone does, then why don't they do nifty?
[44]
Because it has no volume, no liquidity.
[47]
Whereas there are 3 products of MCX, gold, silver and crude.
[49]
There is good liquidity in all the three and many people trade.
[52]
And many brokers, from the same fund,
[54]
means upto 3:30PM, the money with which you did equity trading
[58]
with the same money you can also trade commodities in the evening.
[61]
Many brokers allow this.
[62]
Among the big brokers maybe only Zerodha doesn't allow this,
[64]
in all other brokers this facility is there till date
[66]
that you use that fund in equity till 3:30PM,
[69]
then with the same fund you can later trade in Commodities.
[72]
So funds will not be a problem.
[76]
I am introducing only those products which have liquidity,
[78]
those which don't have, I am not introducing.
[80]
And they have 3 indices, one is Bulldex which is on gold and silver,
[84]
one is Metaldex in which there are all components of metal,
[87]
one is energy index which has started just 2 days ago.
[93]
And trading is slowly starting in all three of these,
[97]
as people feel interested they will slowly start.
[100]
But now we'll do first 3 chapters, first crude, then gold, then silver.
[104]
Crude is coming this week, gold and silver are coming next week.
[107]
So let's start the video.
[113]
see the chart first, it looks like a normal chart now, okay.
[119]
But, I'll tell you 2-3 important things.
[122]
In the world
[124]
the crude trading that happens, 2 types of crude trading is done.
[129]
If you come to investing.com and in Commodities and in Energy
[134]
then you will get here Brent crude and Crude WTI.
[138]
Brent crude is that crude from which petrol, diesel are made in India.
[142]
But the MCX trading that is done in India is Crude WTI.
[146]
This you have to remember. What is the full form of WTI?
[148]
West Texas Intermediate. Okay? This is a US based product
[153]
and its trading is done in India. This you have to remember.
[156]
So which crude trading is done in India?
[161]
WTI futures trading is done. Okay?
[163]
It is a futures contract, derivative product, it is not an investment product.
[168]
So this is only a trading product, it should be taken as a trading product.
[173]
Now, there are some things that you have to remember.
[176]
First thing is this.
[178]
Like this if you see then this is a 1 hour chart on MCX. Okay?
[183]
In this there are 2 components, in the price of MCX
[187]
Crude WTI, the international trade, has an international rate.
[192]
Like suppose you can see here in investing.com,
[194]
Crude oil WTI is 79.58, okay?
[199]
I take this as 79.58
[203]
This is the international rate, and currency rate,
[205]
suppose you are looking at future of October month.
[207]
Now this has monthly futures,
[209]
and it has options also, I'll come to options now.
[212]
This is popular because it has options also and
[215]
the fun that equity traders have in nifty-bank nitfy,
[218]
the same fun commodity traders have in crude options.
[222]
So 79.58 is its international rate, currency rate is what?
[226]
you see the curency rate of futures, USD/INR.
[233]
Suppose we are seeing October contract so we'll see future of October,
[235]
it is 75.11, so 75.11
[239]
From this what should be the rate MCX Crude? Around 5977
[244]
What was the current MCX rate after Friday ending? 5963.
[249]
Means calculation is right because this price is of 2:00AM at night
[254]
price of MCX was closed at 11:30PM. Okay?
[258]
And the currency rate is of 5:00PM in the evening,
[262]
after that currency trading goes on in international markets.
[265]
So because of that the peers trading that goes on in international markets
[268]
of currency, that is also reflected in this.
[271]
So how to calculate the price? This is how to calculate the price?
[274]
Now how to see the chart?
[276]
Price calculation is done, then we'll come to see charts,
[279]
then we'll come to events and then we'll come to options. Okay?
[283]
You see the MCX website first,
[286]
you must be familiar with the NSE website, see the MCX website.
[289]
This is how plane and simple the website looks.
[291]
Where do you have to come? In market data.
[293]
What to do in market data? Market watch.
[296]
First tab market watch.
[298]
Market watch opens, what product do you want? You want crude.
[304]
You searched crude oil here.
[309]
See this, crude oil of 19th October, this is of futures.
[314]
So what is the OI in futures? 10,000 contracts and
[316]
trading of 1lac contracts is done.
[319]
5563 is its last trading price, it went to a high of around 6013.
[323]
Then there are these many options in this.
[326]
In their options also plenty of trading is happening.
[328]
Now you see 6000 at PE, CE. PE of 5900.
[332]
So this way you can see on its website.
[334]
I'll also show you option chain, but I'll show you charts first.
[339]
Look, this crude oil WTI futures,
[343]
I'm showing you price of international markets it's at 79.58
[347]
now you notice one diffrence,
[349]
this has retraced from this price before, again it is around this price.
[354]
Now it is waiting for a breakout.
[359]
In the international markets it has not got a breakout yet.
[362]
It is running on double top, breakout can happen.
[365]
It is a possibility or it can reverse, right?
[368]
If you see the rate of MCX, and this chart is of investing.com
[371]
because in many brokers it's possible that you may have problems in the chart.
[375]
Like in Zerodha also you can get chart of October futures.
[379]
So chart of October futures you can see,
[381]
but suppose if your broker does not give,
[383]
then you can see charts on investing.com, it has free to use charts.
[388]
Means trading view is not there, you get it free to use.
[390]
But if you see MCX, then on MCX you will feel that
[394]
breakout has come in the price. Why will you feel a breakout?
[397]
These are hourly charts.
[398]
You will feel breakout because currency in India is fluctuating.
[404]
From 74.75 it has increased by about 25 paise.
[407]
So because of that you can see this type of impact. Okay?
[412]
So where do we have to identify the breakout?
[415]
We have to identify the breakout in international prices. Okay?
[419]
Now this standing at the resistance level.
[423]
From here it will either get a dip or give a breakout.
[427]
If it gives breakout then upper levels will open,
[430]
and once breakout comes, it will atleast give a movement of 1 Dollar.
[433]
1 Dollar is 70-75 Rupees.
[435]
So movement of 70-75 rupees here on the MCX price which is at 5960,
[440]
here you will get 70-75 rupees above.
[443]
If it retraces, like it retraced some days ago around 78.7
[448]
then you can see here the price of MCX reducing by 100-150 rupees.
[452]
It is at 5963, it had a dip at around 5890.
[457]
So this way you can see the price, whatever price you see,
[462]
on an average consider 75 rupees to a dollar and
[463]
multiply it by 75 rupees, that's it, it's simple.
[466]
Now it is 75, when it reduces, you can multiply by that.
[469]
So you have to remember multiplication here.
[471]
And you have to identify breakout or breakdown from its chart
[476]
from international prices.
[478]
You cannot do this on chart of MCX. Why?
[481]
Because on MCX pricing trading cannot be done that way.
[483]
This is the first thing. Seeing charts is clear. Now,
[487]
like at this level it had made base for many days, now gave a breakout.
[491]
Now when it goes down, then this 74-75 level will work as a support.
[496]
So support level, resistance level of this type will be created.
[499]
Plus it gave this movement,
[501]
now if its retracement happens then how much will it be?
[503]
The same logic of 50%, 63% that we use.
[507]
So the same type of retracement also you can see.
[509]
So if retracement happens then 78.5, 78, 77.5...
[514]
this type of retracement you can get to see.
[516]
So this way you have to see its charts. Charts is over.
[520]
Now let's come to contracts.
[524]
Now at present, three month contract is running,
[526]
19th October, 18th November, 17th December.
[529]
It has expiry in mid of the month.
[531]
It doesn't have a fixed date of expiry.
[536]
The expiry date that happens in international markets,
[538]
according to that they make contracts expire in India.
[543]
So these three contracts are running.
[544]
Now if you want to see its options, then you come to options.
[551]
You will directly get option chain in its options.
[554]
What do you have to do? You have to select the product.
[558]
You come to crude oil, if crude oil...
[562]
Remember one more thing, suppose here was an expiry of 19th October,
[567]
then options will expire some days before that
[570]
and options will convert into futures. This you have to remember.
[574]
Now if you see this, at 6000 price is at 30 rupees, right?
[581]
If suppose its price increases, then it will go from 30 to 31 rupees,
[585]
100 rupees direct increment happens. Okay?
[589]
And its trading is done in paise also.
[592]
So its per tick gives a difference of 10 rupees.
[595]
So suppose if it goes from 30 to 31,
[598]
then there will be a 100 rupees difference.
[600]
That's why by selling it 1 rupee above or below
[602]
people get good amount of money.
[604]
And where is OI more?
[606]
OI is more at 100 rupees interval, at 50 rupees interval, OI is not more.
[611]
So this you have to remember, OI is more at 100 rupees interval,
[614]
in the 50 rupees interval you can be trapped. Okay?
[617]
And similar to this is its Put side OI.
[621]
So if you see on put side, on put option of 6000
[624]
still OI is of 400 contracts and 10,000 contracts were traded in it on Friday.
[630]
This way you can see its OI.
[632]
So if your view is suppose it will fall, then you can buy put.
[636]
And if your view is that it will go up, then you can buy call.
[640]
Breakout, breakdown, you have to identify charts and
[646]
I will explain how much margin in required. Look,
[649]
if you talk about buying 1 lot of future of crude,
[652]
then 1 lot is for roughly around 70,000.
[655]
But why is it still so popular among retail clients?
[657]
It is popular among retail clients because...
[663]
Suppose crude oil I put 6000 PE, CE. Okay?
[672]
I put 6000 PE and 6000 CE.
[675]
So if we calculate for 6000 CE,
[679]
then what is its current price? Around 106. Right?
[685]
6000 CE of October is around 100.
[691]
So if it is at 100, then its 1 lot is for 10,000 rupees.
[695]
Now its put is around 147. Like this option chain we saw,
[700]
in this the last traded price was 106. Movement is of 30 rupees.
[704]
So you understand that there is chance of 3000 rupees increment in a day.
[708]
Like this put option has decined 74 rupees.
[712]
So if some seller is on the sell side, then in 1 lot he may have earned 7400.
[718]
So now if you see PE of 6000,
[725]
if you see PE of 6000 then it is at 143,
[728]
means if you multiply by 100 then you will get 1 lot for 14,300 rupees.
[734]
If suppose someone's view is that it will fall down
[737]
and he takes crude oil 5900 PE. Okay?
[746]
1 strike price down, a 100 rupees strike price down we get it at 93 rupees.
[749]
How much will we get this for? For 9300.
[751]
So that's why its options are more popular in retail clients.
[757]
And it has to be traded keeping in mind these factors.
[761]
If someone is a new player in this,
[764]
then he should observe first for 6-7 months.
[768]
Observe for 6-7 months then trade in it, blindly you should not enter it.
[772]
Because it is a very risky product and
[775]
comparatively among the products that are traded today,
[777]
the most risky product is this.
[781]
And we have to remember two more important things,
[784]
one is crude oil inventory data which is released in the US.
[787]
So you just have to Google it,
[790]
so when you Google crude inventory timing, you will get dates.
[795]
So last was on October 6th, next will be on October 15th.
[798]
And what will be the time? 20:30, means 8:30PM at night it will come.
[803]
When it comes, at that time suddenly volatility increases
[807]
depending on how much inventory has come.
[809]
Means if inventory is higher than last time,
[812]
then the price will react accordingly.
[815]
Because it runs on demand-supply, so if supply is more then price falls,
[819]
and if suppose inventory is less than last time, then price will increase.
[825]
Why? Because quantity is less, demand is growing. So that's why that comes.
[830]
And one is OPEC meeting,
[831]
so before OPEC meeting crude prices become very volatile.
[835]
So how the crude reacts depends on the outcome of OPEC meeting.
[841]
Like if you see, if OPEC meeting is going to happen,
[845]
then prices may increase a little, anticipating a derease in inventory.
[851]
And if they announce that it will be same, then maybe prices become normal.
[854]
And if they announce that they will reduce the output,
[857]
then price runs high fast.
[860]
So that way we will have to keep in mind 2-3 things.
Most Recent Videos:
You can go back to the homepage right here: Homepage