What are the Commodity Trading Timings

Commodity trading is a popular form of trading in India, it involves buying and selling raw materials or basic agricultural products. In India, commodity trading takes place on two major exchanges: 

the Multi Commodity Exchange (MCX) and the National Commodity & Derivatives Exchange (NCDEX). Both of these exchanges work under the Securities and Exchange Board of India (SEBI).

Understanding the commodity trading timing and holidays is important for investors to make informed trading decisions. This blog helps you understand the commodity market timing in India, factors influencing the commodity market timings, the best time for commodity trading, and more in detail. 

Commodity Trading Timings in India

The commodity market timings for trading can be performed in two sessions: the morning session and the evening session. Here’s how they function. 

• Morning Session: The morning session for commodity trading begins at 9:00 AM and ends at 5:00 PM. During this session, traders can easily deal in various securities, including precious metals like gold and silver, industrial metals, and energy commodities such as crude oil and natural gas.
   
• Evening Session: The evening session for commodity trading starts at 5:00 pm and ends at 11:30 pm or 11:55 pm. During this session, traders can continue dealing in base metals and energy commodities. Global buyers can purchase farm products until 9:00 pm or 9:30 pm. 

The commodity market trading time for the evening session is adjusted twice a year to align with the US timings. It means during summer the evening session closes at 11:30 pm, and in winter, the closing time gets extended to 11:55 pm.

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Multi-Commodity Exchange (MCX)

In India, the largest commodity derivatives exchange is the Multi Commodity Exchange (MCX). This exchange allows trading in various commodities like gold, silver, crude oil, and natural gas. The trading hours for MCX are structured to align with both domestic and international markets. Below is a brief about the commodity trading timing in MCX: 

Trading Days: Monday to Friday

Trading Hours:

• For Agri Commodities: 9:00 am to 5:00 pm IST
• For Non-Agri Commodities (Metals, Energy): 9:00 am to 11:30 pm IST (or until 11:55 pm during the U.S. daylight saving period)

Commodity Market Holidays

Here's a table that showcases the common holidays observed by commodity markets in India, specifically focusing on the Multi Commodity Exchange (MCX) and National Commodity & Derivatives Exchange (NCDEX). 

Please note: These holidays might vary each year based on the calendar and regional observances, but the table below gives a typical overview:
 

Factors Influencing Commodity Market Timings

The following are the factors influencing the commodity market timing in India.
 

1. Global Market Timings: The commodity markets of India are directly influenced by the global market timings. This setup helps Indian traders quickly react to global price changes and news, helping them stay ahead in the international market.
    
2. Market Liquidity: To have maximum liquidity while trading in commodities, the exchanges schedule trading hours to help reduce price volatility and make trading easier. Overlapping with global market hours also increases liquidity.
    
3. Regulatory Guidelines: SEBI establishes the guidelines that influence the commodity market timings. Any changes in these regulations like trading hours, holidays, or trading sessions are done to maintain market integrity and for investor protection.
    
4. Local Economic Activities: The commodity trading timing can also be influenced by domestic economic events like budget announcements, government policy changes, and important economic data releases. 

Best Time for Commodity Trading

The following are the best times for commodity trading. 

1. Overlapping Trading Sessions: Keep an eye on when different markets overlap each other like an overlap between  Asian and European trading hours. This time is best as during this time there is an increase in trading activities and it leads to profitable trades.
    
2. Opening Hours of Morning Session: Trading during the first few hours after the market opens often provides a higher liquidity. High trading volumes during this time allow for quicker execution of trades and better management of positions.
    
3. High-Volatility Periods: You may trade in periods of high market volatility, as they tend to result in significant price movements. These fluctuations can be used to make strategic trading decisions. For instance, events like geopolitical tensions or economic announcements can greatly impact commodity prices, offering traders valuable opportunities to capitalize on market shifts.

Conclusion

The timings for trading in commodities are quite important for the traders as they help maximize their strategies and obtain the best possible returns. If traders are conscious of these trading hours, they will be in a better position to act accordingly. They can adapt to the changes in the world’s time zones and periods of great volatility. Besides, if traders were able to determine the market holidays and the things that would influence trading in these commodities, it would help in the appropriate planning of trades. The use of an online trading app also assists in providing real-time updates on the market situation and helps respond promptly to issues related to trading hours.