What is the difference between equity an...

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Ritwik Singh

| Updated on March 15, 2018 | Share-Market-Finance

What is the difference between equity and commodity?

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Prreeti Radhika Taneja

@prreetiradhikataneja4530 | Posted on March 15, 2018

The most evident and basic level difference between equity and commodity is the type of exchanges they are traded on. Equities are traded on NSE and BSE, commodities trade on MCX.


When you buy commodities, you’re buying raw products like copper, silver, sugar, wheat, cotton and more. These products are in very generic forms that are basic and undifferentiated. On the other hand, when you buy equities, you’re buying a share of a registered company; you’re buying a part of the ownership in that company.


Generally speaking, equities are long-term holding assets to enjoy consistent dividend from the company. Commodities are usually traded in aquickspan in order to make profits in asmallerspan of time.


Another difference between the two is liquidity. Equities are more liquid when compared to commodities.

These are few of many (many) differences between equity and commodity. If you’re looking to invest your money in an asset that delivers you consistent and long-term returns, equities are awayto go.


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Prajval Gupta

@prajvalgupta6767 | Posted on March 20, 2019


इक्विटी और कमोडिटी मात्र निवेश के दो अलग माध्यम होने के अलावा कोई समानताएं नहीं हैं।
दोनों के बीच अंतर कुछ निम्न प्रकार से है-
1. इक्विटी खरीदते समय हम खरीदते हैं एक कंपनी के एक छोटे से हिस्से की भागेदारी। कमोडिटी खरीदना मतलब किसी एक धातु अथवा समान को खरीद लेना।
हालांकि अंतर ये होता कि कमोडिटी जैसे सोना, चांदी, गेहूं, ताम्बा, स्टील, तेल इत्यादि को खरीदने के लिए आप सिर्फ बाध्य हो जाते हो एक आने वाली तारीख पर।आप असलियत में इन सब कमोडिटीज को नही खरीदते।
2. इक्विटी खरीदने का मकसद होता है एक लंबी अवधि में मुनाफा कमाना। हालांकि कमोडिटी खरीदते वक्त आप ये अनुमान लगते हैं कि आगे आने वाले कुछ समय मे जब उस कमोडोटी की दाम में बढ़ोतरी होगी तब आप उसे बेच देंगे।


3. इक्विटी खरीदने के लिए आपको स्टॉक मार्केट (सेंसेक्स, निफ़्टी) में खरीदारी करनी होती है। वहीं कोमोडिटी खरीदने हेतु आपको mcx जाना पड़ता है।


४.स्टॉक मार्केट और कमोडिटी मार्केट में प्रोडक्ट की सप्लाई

स्टॉक मार्केट में शेयर की ट्रेडिंग होती है, और शेयर हमेशा निश्चित मात्रा में ही किसी कंपनी द्वारा जारी किये जाते है, और इसलिए ऐसा कहा जा सकता है कि स्टॉक मार्केट में स्टॉक की सप्लाई लगभग निश्चित है, और इसलिए क्योकि स्टॉक लिमिटेड मात्रा में होते है, इसलिए कुछ लोग जानबूझकर साजिश करके किसी कंपनी के स्टॉक को घटा या बढ़ा सकते है,

जबकि कमोडिटी मार्केट में स्टॉक की मात्रा की कोई निश्चित सीमा नहीं है, और इसलिए इसमें आसानी से किसी तरह की साजिश के बावजूद भी कमोडिटी के भाव को घटाना या बढ़ाना संभव नहीं है,


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Brijesh Mishra

@brijeshmishra8622 | Posted on March 6, 2019

Both stock or equity and commodity are investment assets. And the similarity between them ends there.


In layperson's terms, equities are a piece of ownership in businesses. Commodities are the undifferentiated products that are bought and sold between buyers and sellers in futures or forward contracts.

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[Futures, of a particular commodity, is a contract to be a buyer or seller for a select period. So, when you buy a commodity, you don’t actually get the product/good; you basically purchase a contract.]

Common examples of traded commodities are gold, oil, coffee beans, silver, cattle, corn and more.

Generally, investors get into the commodity market with a short-term purview to make "quick money". On the other hand, equities are traditionally held for a longer term until its price is very high.

Or to be more precise, equities are focused more on taking a part of the ownership of the company for a stretchable profit. Commodities are contracts that, purely centric to price change, are purchased and sold to cut a profit.

Loading image... (Courtesy: MoneyControl)

Aside from these differences, equity and commodity are traded on different exchanges…

There are six commodity exchanges in India:

· Multi Commodity Exchange (MCX)
· National Commodity and Derivatives Exchange (NCDEX)
· National Multi Commodity Exchange (NMCE)
· Indian Commodity Exchange (ICEX)
· Ace Derivatives Exchange (ACE)
· The Universal Commodity Exchange (UCX)

On the other hand, there are four permanent stock trading exchanges in India, along with three temporary ones:

· National Stock Exchange
· Bombay Stock Exchange
· Calcutta Stock Exchange
· Magadh Stock Exchange

(Temporary)

· NSE IFSC
· Metropolitan Stock Exchange of India
· India International Exchange

(Note: These numbers change.)

In recent times, indeed, commodities have lost their charm in front of the new investors in particular. However, if traded well, they can be a great source of passive income for you. Gold remains the most popular investment commodity. Copper is another great option.

In any case, both equity and commodity are great investment assets. If you're planning to enter any of the markets, do your thorough research.


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Ashna Sharma

@ashnasharma6899 | Posted on March 8, 2019

Both Equity and Commodity are the financial products on which investors can invest or trade that take place in the stock market. Equity and Commodity on the other hand, both are investment assets assets in which investors can invest their funds by purchasing or trading, we can say it like main similarities between the two.

However, it is, important to understand the difference between Equity and Commodity:

Stock Exchanges: Equities/Stocks/Shares are traded or invested on stock exchanges like BSE (Bombay Stock Exchange) and NSE (National Stock Exchange), while commodities are traded on a commodities exchange like MCX (Multi Commodity Exchange of India Ltd ).

Ownership: As mentioned earlier Equity refers to an investor’s asset that represents a part ownership of a company while commodity refers to a generic form of a product.

Investments: Both equity and commodities are investment vehicles, Equity depends on the success of the firm while commodities depends on the demand of the products.

Product Type/Profits: Commodities are undifferentiated goods and profit margins are purely focused on price changes, while equity is an investment made in a firm that provides the investor with an ownership stake and generally focused on a successful firm.

Liquidity: Liquidity involved in commodity investments are comparatively lesser than equity investments.

Time Frame: Equity investments are longer term and are focused on taking an ownership interest in a firm, commodities are bought and sold with the aim of making a profit through quick, short term trades.


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Jack Johnson

@jackjohnson1402 | Posted on March 8, 2019

Equity refers to shares that are traded on a stock exchange and represent an ownership interest when purchased. Commodity trades are shorter term and focused on making profits through price changes, and equity investments are usually made for a longer period of time, with a focus on ownership in a successful firm.
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What is the difference between equity and commodity? - letsdiskuss