Who are the different types of participants involved in commodity trading in India?

Commodity traders in India are primarily categorised into two types – speculators and hedgers. Speculators, also known as intra-day traders, typically try to exit their long or short positions on the same trading day or after a few days. These traders are known to be direction-agnostic, i.e., they leverage their trades as per market momentum by relying on technical charts to base their trades. On the other hand, hedgers take an offsetting or contrary position in their investments to balance their gains and losses from an underlying asset. They take on an opposite position that allows them to protect themselves against price movements and cover all their bases to ensure they take the minimum risk on their investments.