Despite the shift towards stock markets, commodity trading continues to be an essential part of the Indian finance world. Just like the name suggests, commodity trading refers to trading commodities or a group of goods or assets. These goods are things that we use in our day-to-day lives like coal, gas, gold, silver, coffee, wheat, meat, rubber, etc. The activity of buying and selling these products to earn profits is known as commodity trading.

Commodity trading is a great way for investors to diversify their portfolios. Since the prices of commodities move differently from stocks, many investors use commodity trading to counter the effects of inflation. Commodity trading has, in a way, existed since ancient times. Merchants have always exchanged goods as a way to earn more money or increase their assets. However, with the introduction of the stock market and exchanges, commodity trading has now evolved to a more formal form of buying and selling. While earlier, people bought and stored goods in their physical form, investors today invest in different commodities on the exchange.