Expert guide to commodity trading times in India

Understanding the operational hours of the commodity market is essential for achieving profitability in this asset class. Knowing when to purchase and sell can change the game of your earnings as a trader, regardless of the experience level. 

This is why market participants must understand the timing of these marketplaces, as the commodity market in India functions through several exchanges. This article examines the commodity market timings in India, highlighting the trading hours and how to pick the best time according to your objective.

Understanding commodity trading

Trading in commodities entails purchasing and selling the actual commodities and their derivatives. All raw materials or tradable agricultural products are referred to as commodities. Select a commodity broker and create a commodity trading account before you begin trading commodities. After that, examine the commodity market, comprehend the associated risks, and establish your investing objectives. 

Examples of such products are crude oil, sugar and silver, to name a few. These commodities can help you diversify your asset portfolio when you trade them. 

Initially, commodities are exchanged in large quantities. In contrast to shares, you cannot purchase unlimited units. Rather, you must purchase the goods in several multiples of that quantity. Demand and supply dynamics in the market determine the pricing of these commodities.

You may also like: What is a commodity? A short guide before you trade

Commodity trading time in India

Understanding the commodity trading period and hours is crucial if you’d like to participate in trading commodities. Commodity markets function differently from stock markets in terms of timetable, and trading hours change based on the commodity you are trading. Traders must comprehend these market timings to make well-informed decisions and boost earnings. 

The Multi Commodity Exchange of India Limited determines the timing of the commodity market. Commodity derivatives trading takes place digitally on MCX, an exchange for commodities derivatives. The primary purpose is to assist market players with managing risk and pricing discovery.

Commodity market opening time

You can begin trading in all commodities starting at 9 am.

Commodity market closing time

The closing hours for various commodities on the commodity market vary.

• The non-agricultural commodities trading closes at 11:30 pm.
• The market shuts down for agri commodity trading at 9:00 pm.
• The market closes for all other commodities at 5:00 pm.
• All intraday positions must be squared off 25 minutes before market closing, and trade modifications may be completed up to 15 minutes after market closing or until 11:45 pm.

Here’s a table including the opening and closing times for the commodity markets in India:

The two platforms that Indian commodities traders utilise the most are MCX and NCDEX. Here, we are taking the example of MCX to illustrate the trading timings of commodities. MCX provides trading opportunities for various commodities, such as precious metals, oil, energy, and agricultural commodities. Hours of operation in MCX’s various sectors are between 9:00 am and 11:30 pm. 

There are morning and evening sessions on the MCX market timing. The morning session operates between 9:00 am and 5:00 pm. Energy commodities, base metals, and bullions are among the securities on which traders may place orders during this session. 

The hours of the evening session are from 5:00 pm until 11:30/11:55 pm. International traders are allowed to trade till 9:00 or 9:30 pm on agricultural items. On specific holidays, as well as on Saturdays and Sundays, trading remains halted. 

Also read: Understanding after-hours trading and strategies for success

Best time to trade commodities in India

• Opening Hour Benefit: Because of the market’s strong liquidity, trading is most advantageous in the first few hours after opening. This facilitates trade execution and efficient position management.
• Overlapping Trading Sessions: When Asian and European markets overlap, for example, keep an eye out for possible opportunities. This may lead to a spike in some commodities, such as crude oil and gold.
• Volatility as opportunities: Understand fluctuations in markets since they often result in more significant price swings. Make use of these swings to your advantage while making trading decisions. For instance, volatile geopolitical environments may affect commodities prices, opening doors for traders.

Ideal times to trade different commodities 

Crude oil trading timings in India are opening at 9 am and closing at 11.30 pm on MCX, Monday through Friday.

Similarly, gold trading time in India and natural gas trading time in India on the MCX are also from 9:00 am to 11:30 pm, five days a week. When demand and supply are strong in the market—typically during India’s festive seasons—it is the ideal time to trade gold.

On the other hand, since natural gas is more often used for heating and cooling throughout the winter and summer, these are the ideal times to trade natural gas.

Also read: Gold vs Equities- Which is the right investment option?

Factors influencing commodity market timings

Several variables determine the timetable and trading hours. The following are a few variables that affect commodity trading time:

• Supply and demand:

The dynamics of a commodity’s worldwide supply and demand substantially influence the timing of its trade. Extended trading hours may be necessary to accommodate increased market activity due to demand spikes or abrupt supply chain interruptions.

For instance, longer trading hours may be required to accommodate the rising demand for this essential commodity if geopolitical events impact the supply of crude oil.

• Market regulations: 

Market regulators are important when determining the trading hours and timetables for commodity markets. All players have equal access to the market thanks to these laws, which also guarantees honest and open business practices. To preserve market integrity, regulatory authorities set rules and supervise how commodities exchanges operate. They also make sure that trading hours are followed.

• Differences in time zones:

Since commodity markets are international in nature, time zone variations are a major factor in setting trading hours. The working hours of various nations and areas cause differences in the trading sessions of the commodity markets. 

In order to efficiently organise their trading activity and coincide with the different market hours, traders need to take these time zone variances into account.

• Current political and economic events:

Events in politics and the economy have a big influence on when commodity markets open. Market volatility may be brought on by changes to governmental regulations, shifts in economic data, or natural catastrophes in important commodity-producing areas. 

Trading hours could thus be extended in order to give market players time to respond to and take advantage of these developments. These longer trading hours provide traders the flexibility to modify their risk and position strategies in response to changing market circumstances.

Conclusion

To engage in the commodities market, traders and investors must be aware of the trading timings. Having knowledge about normal trading hours and extended trading sessions allows market players to take advantage of opportunities, control risks, and make well-informed choices. But it’s important to keep in mind that the trading hours mentioned above are flexible and might alter based on certain exchanges and local holidays.