How to Trade in the Commodity Market Zerodha?

Ever bought onions at ₹40 one week and ₹70 the next? That’s price fluctuation, and that’s exactly what commodity trading is about. Instead of onions and potatoes, though, you're trading things like gold, silver, crude oil, and natural gas online. Here we will discuss more about how to trade in the commodity market Zerodha.

What is Commodity Trading in Zerodha?

Commodity trading means buying and selling natural goods like:

• Gold
• Silver
• Crude oil
• Natural gas
• Cotton
• Wheat

In Zerodha, you're trading these through MCX (Multi Commodity Exchange), just like you trade stocks through NSE or BSE. Let's say it's like trading Indian real-world essentials on an app, trying to earn profit when prices go up or down.

For example, let's say;

• You decide to trade Crude Oil on Zerodha
• The current price is ₹6,500 per lot
• You buy 1 lot (just one, to keep it simple)

Price Movement: In commodities, especially crude oil, 1 tick (that’s a ₹1 move) = ₹100 profit or loss per lot.

• So if the price goes from ₹6,500 to ₹6,550.
• That’s 50 ticks × ₹100 = ₹5,000 profit.

But it works both ways: If the price drops from ₹6,500 to ₹6,495.
You lose ₹5 × ₹100 = ₹500 loss

That’s why stop-loss is your seatbelt. Without it, one wrong move and you’re out of the game. Always set a stop-loss, for example, if you buy at ₹6,500, set a stop-loss at ₹6,480. That way, if the price goes against you, your max loss is ₹2,000, not your entire capital

Why Even Trade Commodities?

Here’s why commodity trading on Zerodha makes sense, especially for everyday Indians:

Quick Price Moves = Quick Money

Commodities like crude oil, gold, and silver move FAST.

• One day, crude oil is at ₹6,400, the next day it’s ₹6,700.
• That ₹300 jump can mean ₹3,000 profit per lot.

It’s like trading rollercoasters, risky, but thrilling if you play it smart.

Great for Bad Days in the Stock Market

Think of commodities as your backup plan. When stock markets go down (due to elections, war, inflation, etc.), commodity prices usually go up, especially gold.

• For example, when Nifty drops, gold often shoots up.
• So if your stocks are bleeding, your gold trade might save the day.

It’s like keeping a raincoat during monsoon season, not always needed, but a lifesaver when it pours.

Start Small, Think Big

You don’t need ₹50,000 to trade.

• You can start with ₹1,000 to ₹3,000, thanks to margin trading.
• Zerodha lets you trade mini lots of crude oil or natural gas without breaking your FD.

Even your monthly chai-samosa budget can get you into the game.

How to Open a Commodity Account?

So you’ve decided to trade gold, silver, crude oil, or natural gas? But first, you need to open a commodity trading account with Zerodha. If you already have a Zerodha equity account, you can simply activate the commodity segment; no need to open everything from scratch. Let's know for both online and offline users, but who can open a commodity account online?

• Resident Indian individual
• Your mobile number must be linked to Aadhaar

If not linked? Then you’ll have to go the offline route. And it's FREE, there are no more account opening charges from 29th June 2024 in Zerodha.

Online Process

Here’s how to activate the commodity segment from Zerodha Console:

1. Visit console.zerodha.com and log in.
2. Click on ‘Activate Segment’ from the menu.
3. Click on the ‘Commodity’ segment.
4. Hit ‘Continue’.
5. Select your income range, trading experience, and commodity classification.
6. Upload income proof (e.g., salary slip, ITR, bank statement).
7. If the file is password protected, enter the password.
8. Accept all terms and conditions.
9. Click ‘Continue’, then ‘Proceed to e-Sign’.
10. Click ‘Sign Now’, enter your Aadhaar number.
11. Click ‘Send OTP’, enter the OTP received on your Aadhaar-linked mobile.
12. Done! Your request is submitted. Approval usually takes 24–48 hours.

Offline Process (For Non-Aadhaar Linked Users or Organisations)

You need to follow this process if:

• Your mobile is not linked with Aadhaar, or
• You’re a Partnership, LLP, HUF, Society, Trust, or Company account holder

What to Do:

1. Download the Segment Addition Form from Zerodha's website
2. Attach self-attested income proof (ITR, salary slip, bank statement, etc.)
3. Courier it to this address: Zerodha, 153/154, 4th Cross, J.P Nagar 4th Phase, Opp. Clarence Public School, Bengaluru - 560078

Steps to Trade in the Commodity Through Zerodha

Before anything else, you must have a Zerodha commodity trading account. If you already have a Zerodha equity + demat account, just activate the commodity segment via Zerodha Console, which we explained earlier. Zerodha doesn’t allow commodity-only accounts; an equity account is mandatory. Once that’s sorted, here’s how you actually place a commodity trade using Zerodha Kite:

1. Go to kite.zerodha.com or open the Kite app.
2. Log in using your Zerodha ID and password.
3. In the search bar, type the commodity symbol (e.g., CRUDEOILJULFUT, GOLDJULFUT).
4. Click ‘+’ to add it to your Watchlist.
5. Select the contract you want to trade.
6. Hit ‘Buy’ or ‘Sell’ based on your direction.
7. Enter trade details:

Now you need to ensure that to have a sufficient margin in the commodity trading account for successful order placement.

Zerodha Commodity Trading Charges & Margins

Let’s be real, nobody likes hidden charges. Before you start trading, you must know what you’ll be paying. Here are the charges on Zerodha.

Trading Charges

Margin Required to Trade

Tips for Beginners Trading Commodities on Zerodha

If you’re just starting out, don’t jump in like it’s a Diwali sale. Commodities move fast, and you can make or lose money in minutes. Follow these solid, beginner-proof tips:

Start with Just 1 Lot

Don’t be greedy. Start small.

• Think of it like learning to ride a scooter; you don’t hit the highway on Day 1.
• One lot is enough to learn how prices move, how orders work, and how to handle risk.

Always Use a Stop-Loss

A stop-loss is like a seatbelt in a car; you may never need it, but it’ll save your life when something goes wrong.

• For example, you buy crude oil at ₹6,500
• You can set a stop-loss at ₹6,480
• If the price falls, Zerodha automatically exits your trade, and you only lose ₹2,000 instead of ₹20,000

Avoid Trading During Big News

When there’s a Budget, RBI policy, or global war alert, the market behaves like Delhi traffic after India wins a match: unpredictable, chaotic, risky.

• Stay out of the market during those times unless you're a pro.

Stick to Liquid Commodities (More Buyers = Safer Trades)

Don’t go trading exotic stuff like cottonseed or mentha oil unless you know what you’re doing. For beginners, focus on popular contracts like:

• Crude Oil
• Natural Gas
• Gold
• Silver

These have high volume, which means you can enter and exit trades easily without getting stuck.

Best Time to Trade? 8 PM - 11 PM

This is when global markets are active, especially the US.

• Crude oil and natural gas get volatile
• You’ll see more movement and better chances to make money

Treat this time like the evening prime-time show of the commodity market.

Cheapest Commodity Broker in India 

Here are the cheapest commodity brokers in India. Let's have a look at it.

Rank	Broker	Active Clients	Brokerage
1	Zerodha	7,884,365	INR 20 per executed order or 0.03% (whichever is lower) for futures; Flat INR 20 for options.
2	Angel One	7,132,861	INR 20 per executed order or 0.25% of transaction value (whichever is lower) for intraday, futures, and options.
3	Upstox	2,771,549	INR 20 per executed order or 0.05% (whichever is lower) for futures; Flat INR 20 for options.
4	Dhan	739,810	INR 20 or 0.03% of trade value (whichever is lower) for futures; Flat INR 20 for options.
5	5paisa	526,773	Flat INR 20 per executed order (can be lower with specific plans like Power Investor/Ultra Trader).
6	Fyers	240,489	INR 20 or 0.03% (whichever is lower) for futures; Flat INR 20 for options.
7	Alice Blue	161,168	INR 20 per executed order or 0.01% (whichever is lower) for futures; Flat INR 20 for options.
8	SAMCO	96,900	INR 20 per trade or 0.02% (whichever is lower)
9	Tradingo	80,523	INR 20 per order or 0.05% (whichever is lower) for futures; Flat INR 20 for options
10	TradeSmart	28,408	INR 15 per order (Power Plan) or 0.007% on Turnover (Value Plan) for futures; INR 15 per order (Power Plan) or INR 7 per lot (Value Plan) for options.

Note: It may differ from the original data as data fluctuates from time to time. For an accurate amount, you can visit the official website of the Broker.

Also, Check - Upstox vs Zerodha: Features Comparison, Charges & Review

Conclusion

In conclusion, commodity trading in Zerodha is like buying a train ticket; you just need the app, a little common sense, and a plan. If you treat it like gambling, it’ll empty your pockets. If you treat it like business, it might just pay your bills (or that Goa trip you’ve been postponing). We hope this blog on how to trade in the commodity market Zerodha has been helpful to you.