What is a Commodity Trading Account?

If you are venturing into commodity trading online, chances are that you have been asked to open a commodity trading account. A commodity trading account is a basic necessity for traders who want to trade commodities like gas, oil, metal, agricultural products, raw materials, livestock etc.

But what else can you do with a commodity trading account and how to open one? Before heading into that, let us take a glance at the concept of commodity trading.

What is a Commodity Trading Account?

Gone are the days when commodity trading used to take place only in physical markets. With the advent of the internet and smart online trading platforms, a commodity trader can exchange goods or a group of assets online to earn profit.

You need to open a commodity trading account with your choice of broker to trade in commodities. The trading account is linked to a Demat account. While the trading account is used to buy and sell assets, the Demat account stores your commodities in an electronic format.

Opening a trading account with a longstanding platform like Dhan enables you access to a dedicated commodity trading dashboard. You can also avail the benefit of obtaining a margin on commodity options and the ability to trade commodity futures.

You can open a commodity trading account without investing much time, effort or paperwork. Here is how to open one easily.

How to Open a Trading Account?

It hardly takes a few minutes to open a trading account. However, it is essential to keep the necessary documents ready. Here are the steps to open an account for commodity trading.

Step 1- Choose Your Broker

The first step is to choose an online commodity trading platform. Make sure you select a reputed SEBI-authorized broker that offers benefits on commodity trading.

Step 2- Complete Registration

Most brokers allow the opening of trading accounts after completing the registration process. Simply enter your mobile number and email in the registration area and verify using OTP.

Step 3- Submit Documents

Your broker may then ask you to submit ‘Know Your Customer (KYC)’ documents. Uploading a PAN card is required by most brokers. Depending on your platform, you can select from Aadhar, driving license or passport.

Step 4- Upload Photo & Signature

This is a new step introduced by the trading platform as a form of double authentication. You can take a live selfie or upload your photograph. Make sure the images are clear and latest.

Step 5- Account Declaration

Your broker may ask you to declare your current profession, yearly income and trading experience. This is required to set up an account that can cater to your unique profile. If you want to enable F&O trading, you can enable that in this step.

Step 6- Bank Account Verification

You can verify your bank account using either an account statement, canceled cheque or passbook. The platform might deposit Rr 1 in your account to verify your account details.

Once you have uploaded all the necessary documents, you are all set for commodity trading online. Just log into your account and start trading!


A commodity trading account is required for buying and selling commodities online. You can open a trading account easily in a few steps with commodity trading platforms. Using a reputed trading platform like Dhan provides access to live market monitoring tools and benefits that can help you trade commodities profitably.

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