Commodity spread/straddles

A commodity straddle is an options trading strategy where a trader buys both call and put options with the same strike price and expiration date. It profits from significant price movement in either direction, provided the gains exceed the premium paid for the options.

Related Terms

Commodity Exchange

A commodity exchange is a regulated marketplace where standardized commodity contracts and related investment products are traded. It enforces rules for trading. Initially focused on agricultural products in the 19th century, modern exchanges now involve a broader range of commodities and derivatives.

Commodity

A commodity refers to raw materials or physical goods like metals, grains, oil, and cotton, essential in manufacturing consumer products. It also includes financial products such as currencies or stock indexes, widely traded in markets for industrial and consumer use. 

Circuit Breaker

A circuit breaker is a regulatory measure that halts trading across an index or market to prevent panic selling during drastic price declines. It helps control volatility, giving investors time to assess market conditions and avoid impulsive decisions during market turmoil.

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