Brokers in india not much eagar to sell e-Gold and e-Silver of NSEL

Brokers in india not much eagar to sell e-Gold and e-Silver of NSEL

Last year National spot exchange of India ltd launched e-series for different commodities like Gold, silver,copper and zinc.since then e-Gold and E-Silver are trying to become popular among investors.But it has not popular among brokers.Uptill,trading was possible only at multi-commodity exchange(mcx) ncdex and ICEX, all offers trading in future market only,,not cash market.

But it has seen that persons opting for franchisee of commodity brokers are more interested in mcx and ncdex only,,not for spot exchanges.

Some common reasons for that are:

1.Basically,,investor awareness is very less in India about commodity trading.Very less people know about commodity trading.

2.There is no enough maturity among Indian investors about holding of commodities especially gold and silver in electronic form,,unlike western countries where investors prefer ETfs more for the same.

3.Important factor is about volume of trading.For future market being a lot syetem,,broker can achieve a good amount of turnover even for less number of trades.This is not possible in spot market,it is more about conservative investors who wants to invest for longer term which is not in favour of brokers who needs continuous cash churning of available margin.

If we take example of trader having Rs.1Lakh margin account in MCX,,he can easily take position of silvermini(5 Kg) as required margin is around Rs.18,000 and can hold positionas he have margin availableto hold the position.while for medium term investor to take cash position in cash market without any hassle must have cash margin of more than 2lakh.(I think brokers may provide leveraged position for intraday only in spot market).so he will of course prefer to take positions at future market only.

Also,,mcx is already offering 1 Kg Lot for silver and 8Gram of Goldguine lot for small investors...Only need is to carry over position in next contract.

There is significant investment for any commodity broker, as market timings are upto 10:00 a.m. to 11:30 p.m. there is requirement of at least couple of dealers for two shifts,necessary infrastructure,connectivity charges,Deposit payable to exchange or main brokers,,considering all these things business generated from spot exchange may not be sufficient for them.They have only option to apply enhanced brokerage rates for investors which is not possible beyond a certain limits and so preffering to remain sidelined from offering this way of investing.

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