Difference between Stock and Commodity Market:

[Mansitrifid]

1. Time Validity of product for being traded: In the stock market if an investor buys stock from any company then he can hold the stock in the demat account for a long time according to his choice. But in the commodity market, it is compulsory to sell the product at a fixed time after buying gold, oil silver or crude. In commodity markets, there are two options for trading which are Future trading and Options trading. Usually trading in future and option is from one month to 3 months. Which means if someone is dealing in a commodity, then he may need to complete it in 3 months. But in the stock market, there is no fixed time period or expiry date to sell the stock.
2. Differences between income from stock and commodity: Another major difference between the stock and commodity market is that the trader has the benefit of dividends on the stock purchased in the stock market. While on the other hand, commodity market does not have any dividend benefit, the trader can profit or loss through trade only.
3. The stock market is investment and commodity market is trading: In the stock, a market trader invests money through buying stock or shares, in which a trader can make the profit from dividend and capital.

While the commodity market is not actually invested, but it is more about trading. In the commodity market, you have to behave completely like a trader. Take help from the broker, professional experts or advisor who provides profitable commodity trading tips.

 

[tomorton]

I can only hope that this makes sense to someone somewhere.

 

[postman]

I didn't realise T2W was starting its own Investopedia section.

For any "Not the 9 o'clock news" fans out there ...
Roger's Trading Thesaurus.

4. Option: A way of extracting larger amounts of money in a very short time period from 'get rich quick merchants' who went to a four hour day trading seminar in their local Hilton Hotel.
5. Carry trade: A way of propping up the Japanese currency while simultaneously making US stock prices soar.
6. Futures rollover: A way of continually losing more money on betting the US markets will go down after selling S&P futures three months ago. (See "Martingale trading").

Did I miss any?

 

[J_C_Anderson]

Another important difference is leverage: futures have huge built-in leverage while most of the brokers provide just 1:2 leverage for stocks. This happens because you actually do not need to pay the full cost of the futures - it would be enough to deposit a margin, which in most of the cases stands between 5 and 15 percent of the total contract value. Thus, if you buy futures for 5 percent, and the price moves 5 percent in any direction, you either lose all your investment or double it. That is why futures are the instruments for qualified investors (traders) who have sufficient experience to deal with risks related to high leverage. At the same time, stocks are better for conservative trading while sometimes they can offer exceptional trading opportunities too.

There is important to mention another financial instrument that could be used to trade both stocks and commodities - exchange traded options. They are closer to futures due to their features, but they are a bit different. Without long explanations of options` nature that could be found in any financial source, it is necessary to mention that they could be also useful for some strategies. In this case, the time becomes very important - even more important, than as in the case of futures, since options lose their value closer to the expiration date.