OPTIMUS COMMODITY FUTURE PRIVATE LIMITED
Vijayawada, Hyderabad, Bangalore etc…
Severe warning. Do not deal with these people.
If you are glancing at the newspapers with your hot cup of morning tea and a small advertisement promising 5 to 10 percent returns on your investment lures you, beware!
This is what happened to me some months ago. Those were early days when I was not financially literate and wanted to invest some money for returns that would beat bank FD’s and inflation. It would turn out to be the biggest and should I say very costly mistake I made in a very long time. This is what happened.
I called the number in the advertisement and the very next day a salesman appears on my doorstep with catalogs and sheets of color printed material showing the stupendous returns investors have made with them. With cunning and clever talk of them being registered with MCX, SEBI etc., to give them an air of authenticity they claimed that though there were risks, the rewards were always way above. First mistake was to trust them. A red flag should have gone up for, ‘if a thing is too good to be true, it probably is’. The next mistake was that I did not do a background check where SEBI clearly states that no Commodity broker is allowed to take money from a client and trade on his behalf. What is commonly called PMS (Portfolio Management Services).
Anyway, I invested 1.50 lakhs in their ‘Cub’ scheme which were trades in Silver and Gold. The claim was 10 to 15 thousand rupees profit a month. Give or take some losses. From the beginning, I decided to maintain an excel sheet of how my investment does. The first month was no gain with a small loss of capital. Then for two months I received a profit of 15 thousand each totaling 30 thousand. So far so good. That’s when the trouble started. From here on the losses started to mount month on month. Since I was tracking the trades, I noticed that in one month though a profit of 15 thousand had reached in the first week, they refused to give me the money claiming that profits will be given only at the end of the month. I should have been suspicious right then and there and withdrawn my money. I argued that since the target has been reached, you need not trade for the whole month if required and my capital of 1.50 lakhs is still intact. They refused and from there on it became a steady decline. Many calls thereafter to ask them to moderate their trade positions went unheeded. My capital started eroding and four months down the line, it came down to 48 thousand. Enough was enough. I called their head office and had them stop all trades and refund what was left of my capital. It took a lot of threats on my part to get them to comply. All found, my return on investment of 1.50 lakhs was 80 thousand (if profits are included). A loss of 70 thousand rupees or nearly 50% of investment.
Trading Silver is highly risky, it being a very volatile script. It takes immense skill to read the trends right and manage risks. None of which they have. Seeing the way things were going with this misadventure, as well my investment with Karvy Private Wealth (which is another story), I decided it was about time I got myself educated. Three months down the line spending countless hours reading on the net and various books as well as talking with many brokers, I have brought myself upto speed on the fundamental do’s and don’ts. This is something I wish to share with those who are not financially literate but want to find better returns on investment through trading commodities.
1. Do not believe, trust or invest with any Broking company (or its various sub-brokers and agents) that claim to do commodity or equity trading for you. They make false claims on huge returns which will most definitely not work and you will end up losing money. While this is not legal and does not have SEBI clearance, almost all of them do not have the knowledge, skill or ability to follow the fundamentals of trading on your behalf. They are playing with your money to earn commissions by way of brokerage but will not have the commitment to managing your money or the attendant risks.
2. In my experience with Optimus Commodity, they mislead, misrepresent and outright lie about their past performance. Anyone can type and print out fancy figures. Proof will only come with actual contract notes and statements of trades done. This they will not show you anyway since it is a lie. Keep away from them.
3. All brokers are not bad but in their greed to capture a slice of the growing interest in innocent investors who are looking for a better return, they can and will twist the facts to suit their interest. This is – brokerage. Their main income is from brokerage.
4. Bottom line; learn to trade on your own. It is not easy but do-able. You may not make tons of money (but then again you just may!). Take a few months to read books and all you can on the net and there is plenty of it for free. Talk to traders, brokers and attend a training program if you must but you do not need to pay an arm and a leg for it. A few thousands and there will be lots of people willing to teach. Remember you are trying to learn the ropes. What trading is about? What are charts and how to read them. Some idea on technical analysis (a vast subject) and fundamental analysis. Each individual trader has a different trading style. Learn, Learn, Learn…
5. Take a trading account with a broker who offers the least brokerage. Don’t be mislead with fancy words like ‘ we offer this service and that facility and hence we charge more’. All you need is a trading platform which is the terminal and software through which you can buy and sell. All of this is online these days and it makes no difference at all. Brokerage prices are often quoted in percentages 0.05 or 0.03 which translates to the amount charged on the total value of your trade (not the margin you put up). This means anywhere from 5000, 3000 or 2000 rupees per crore of trade volume. I managed to find one that charges just 500 rupees per crore. They are fine and I have had no problems. Remember brokerage adds up to quite a pile and eats into your trade profits and adds to your losses.
6. You will lose and you will win in trading. That is par for the course. Keep your trades small and cut your losses and run your profits. It will take time but it is fun. Control your emotions. Greed and fear are the biggest drawbacks to a traders psyche. Keep this in check. Keep reasonable targets and exit when you reach them. You will get the hang of it. Discipline is the key.
7. Ultimately, you would have learned a skill for life. Educated yourself in something new and who knows found yourself an avenue to supplement your income in your spare time. Or better still like many others out there make a full time living out of it right from home. Either ways, you are not throwing your money at charlatans. You are in control.
8. Lastly and most importantly. USE ONLY RISK CAPITAL. Or that small portion of money that will not hurt you if you loose it.
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