MCX options vs futures - which is better for beginners?

chethan

I am new to commodity trading. Should I start with futures or options on MCX? I have some experience in equity options but commodity options seems different. Please guide what is better starting point.

chethan

Reply by: Derivatives_Teacher
For beginners I always recommend starting with futures, not options. Commodity options on MCX have lower liquidity and wider spreads. Also unlike equity options, commodity options settlement and margining is different. First understand futures properly, learn how to manage positions, calculate risk and only then move to options.

chethan

Reply by: OptionsSpecialist_Pune
I partially agree but options do have advantage of limited risk if you are buyer. In futures one wrong trade can wipe out your account if you dont have stop loss. So if someone is very new and wants to learn with real money, buying out of money options with small amount is safer than futures. But yes liquidity is a concern in MCX options.

chethan

Reply by: RealityCheck_Trader
Both of you are giving theoretical answers. Reality is most beginners lose money whether they trade futures or options. First learn on paper trading, understand how commodity markets work, follow prices for 2-3 months and only then put real money. Dont rush into trading just because you have some equity market experience.