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What are the differences between commodities and stock market?

The commodities market is a market which is made up of more than one entity. In this market two other markets are also inculcated one is cash market and the other one is the futures market. Commodity tips are very helpful for investors and traders by this they can earn good returns on their investments. The commodity market is primarily traded in economic market rather than manufactured products.

The futures market are traded by future contracts and this is the oldest way of investing in commodity. Whereas the cash market or actuals deals in actual commodities i.e physical goods.

In stock market there are number of stock exchanges in different countries. It refers to the collection of markets. The stock market is also known as the equity market. In stock market shares of listed companies are traded. Basically it is aggregation of buyers and sellers which represents ownership claims on businesses. Stock exchanges facilitates the stock brokers to trade company stocks and other securities. This list shares of common equity as well as other security types. In stock market buying and selling of shares takes place.

Both the terms commodity and equity i.e stock are very commonly used when explaining investment and trading which takes place in stock market.

Similarity between stock market and commodity market.

The main similarity between these two is that both the equity and commodities are for investment and we can say that these are investment assets in which the investors and traders can invest their funds by purchasing or selling.

Differences between stock market and commodity market.

In commodity market the commodities or products which are traded has several varieties, and each lot in the a grade my vary from other lots in same grade. Whereas, in stock market one unit of a security does not differ from another in term of its face value & characteristics if they are of same type .

The commodity futures market have much more basic role as compare to stock market. Whereas in stock market derivatives the derivatives is a product or contract which does not posses any value of its own. It derives its value from an Underlying Asset.

Commodity deliveries therefore have far greater implication for buyers & sellers than mere payment or receipt of contractual price, as in the case of buying or selling of securities. Whereas, in stock market one unit of securities does not decline of period of time. Also the quality deteriorates due to improper storage & transport conditions.

In commodity market the commodity supply is not fixed, whereas in stock market its supply is almost fixed.

In commodity market buying or selling of commodities takes place. Whereas, in stock market buying and selling on shares takes place.

The market have various advantages, however it is very risky too. In order to gain profit and earn good returns Intraday tips are very helpful for trading in stock market.