InvestorQ : Is risk management important in commodity markets too?
Sam Eswaran made post

Is risk management important in commodity markets too?

Dia Deshpande answered.
3 years ago

Yes it is and in fact a lot more. Understanding any successful market is all about understanding how risk is managed in these markets. What holds true for equity and derivative markets also holds true for commodity markets. Like in equity and derivatives, commodity markets also follow a stringent risk management, surveillance and monitoring mechanism. From the trader’s perspective, risk can be managed at the time of placing the orders itself. From the point of the view of the commodity exchange, margins are an important tool for managing exchange level and market level risk. Of course, exchanges also have their teams to do real-time monitoring and surveillance of trades and positions but the entire process of risk management begins with the margining system