WHAT IS COMMODITY MARKET?
While we are aware about the Stock Market in India, Commodity Market is yet another type of Financial Market in the world, which is a market to trade in commodities on the exchange. Commodities are bought and sold in the commodities market by the investors/traders, just like stocks are bought and sold and traded in the Stock Market. Let us see the difference between Stock Market and Commodity Market to understand them better:
| Sr. No. | Stock Market | Commodity Market |
| 1 | Stocks i.e., equity shares are bought, sold and traded on the Stock Exchange. | Commodities i.e., Gold, Silver, Crude Oil, Natural Gas, etc. are bought, sold and traded on the Exchange. |
| 2 | They are traded on exchanges like NSE, BSE, etc. | They are traded on MCS (Multi Commodity Exchange), National Commodity and Derivatives Exchange (NCDEX), etc. |
| 3 | The stocks derive their value depending on the Company, its profits, financial position and decisions, etc. | They derive their value essentially from the underlying asset i.e., the commodity. |
| 4 | You need a demat account to buy, sell or trade in Stock Market. | You can buy, sell or trade in the Commodity Market with the same demat account you have for stock market. |
| 5 | You can invest by directly purchasing the shares, on the spot. | You can invest only through a future contract or an options contract. |
| 6 | It is less risky to trade in Stock Market. | It is more risky to trade in Commodities Market. |
These are some of the key differences between the two.
Trading in Commodity Market is a riskier business, and it recommended to do so under expert guidance. We, at Stakeindia are professionals in the same. We are the oldest stock market teaching Institute in Nashik, Maharashtra! Get in touch with us at stakeindiainstitute@gmail.com to know more!
