Compare equity and commodity.

The major differences between equity and commodity are as follows −

  • Investment/capital invested in a firm/entity to acquire ownership.

  • Known as shareholder.

  • Have ownership of that particular firm.

  • Less volatile.

  • Long term investments.

  • Less risk compared to commodity trading.

  • They get dividends.

  • Better liquidity.

  • Very few regulations, free market.

  • Don’t need margin.

  • Risk is not diversified.

  • Do not have lot size.

  • Traded on stock exchanges.

  • long duration.

  • Infosys, reliance etc.

  • Refers to undifferentiated product on which traders can invest.

  • Known as an option holder.

  • No privileges are available.

  • Highly volatile.

  • Highly risky.

  • Not eligible for dividends.

  • Low liquidity compared to equity.

  • Supervised by SEBI, derivative market.

  • High margins required.

  • Risk is diversified.

  • Traded in lot size.

  • Short term trades.

  • Traded on commodity exchanges.

  • They have time frame because they are based on future price.

  • Sugar, wheat, gold etc.

Updated on: 24-Jul-2020


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