Differences Between Commodity Vs Stock

Last Updated on March 19, 2022 by QCity Editorial Stuff

Commodities are raw materials like gold, silver, and oil. Stocks are shares in a corporation that represents ownership of the company. Commodity prices fluctuate based on supply and demand whereas stocks can be priced at whatever value investors choose. Investors buy commodities because they believe their price will go up over time whereas stock buyers invest for profit now or to fund retirement. The two investments also have different tax implications which is another important consideration before investing in either one.

Commodities are products that are traded on the open market. There is no universal standard for what constitutes a commodity, but they often include goods like gold, silver, wheat, and oil. A stock is a security that represents ownership in a corporation or company. Stocks can be traded publicly on an exchange such as the NYSE (New York Stock Exchange) or privately between investors without any formal intermediary. 

The major difference between commodities and stocks is how they are tradable. Commodities trade according to supply and demand dynamics while stocks trade according to their value relative to other companies’ stocks; this allows for more pricing predictability with stocks than with commodities where prices can fluctuate wildly due to external factors like global weather patterns or geopolitical.

Comparison between Commodity and Stock

Parameters of ComparisonCommodityStock
TermCommodities are natural resources such as gold, silver, petroleum, and wheatStock is a company’s share of ownership in another company
PriceCommodity prices fluctuate with supply and demandwhereas stock prices depend on the company’s performance
InvestorInvestors can trade commodities but stocks must be bought at their current price and sold later when the investor wants to sell themWhen you buy shares of stock in a company, you get part ownership in that business whereas when you purchase a commodity like oil or gas, it doesn’t give you any rights to anything besides what it was purchased for
SetThe prices for commodities can be set by supply and demandwhile stocks have set prices that fluctuate.  
Trading startCommodity trading starts at 5 am ESTstock trading doesn’t start until 9 am EST

What is Commodity?

A commodity is a term used to describe goods that are interchangeable and can be traded with other goods. The technical definition of “commodities” is the class of goods that markets trade in, such as metals, grains, oil, or coffee beans. These items are typically not considered “luxuries,” but rather products essential for everyday life. Commodity prices fluctuate on an international market due to natural disasters (hurricanes), political unrest (eg: war), and economic policies (eg: interest rates).

Commodities are goods for which demand does not increase when the price increases. This is in contrast to a good with inelastic demand, where people will still buy it even if you raise the price. Commodities are often raw materials that are turned into finished products like food or jewelry, but some commodities have no use after being mined out of the ground – examples include gold and copper ore. 

Commodity prices can be volatile because they’re determined by supply and demand rather than market forces like inflation. The commodity markets were created specifically to help manage these fluctuations so that consumers would know how much things cost on average over time without having to worry about sudden changes due to random events or panic buying.

Differences Between Commodity Vs Stock

What is Stock?

In its simplest form, the stock is a security that represents an ownership interest in a corporation. When you buy stock, you become a shareholder in the company and are entitled to vote on key matters, such as the election of directors. You may also receive dividends if the company pays them out. While there are numerous factors to consider when investing in stocks, understanding what stock is can be a good place to start.

Many people have heard the term before, but may not be exactly sure what it is. In simplest terms, the stock is a share in a company that represents part ownership. When you buy stock in a company, you are buying a piece of that company and becoming a shareholder. As a shareholder, you are entitled to certain rights and privileges, including voting on important matters and receiving dividends (an amount of money paid out by the company to shareholders) if and when they are declared. Stock can also be sold or traded at any time on the open market. If you’re thinking about investing in stocks, it’s important to understand the basics first.

Differences Between Commodity Vs Stock

10 Differences Between Commodity and Stock

1. Commodities are raw materials and goods.

2. Stock is a share of ownership in a company or other business.

3. A commodity’s value changes with the market, while stock values change based on the company’s performance.

4. The prices for commodities can be set by supply and demand, while stocks have set prices that fluctuate.

5. Commodities are traded on exchanges such as NYSE or NASDAQ, while stocks trade through brokers like Fidelity Investments.

6. Commodity trading starts at 5 am EST, whereas stock trading doesn’t start until 9 am EST.

7. Commodity prices fluctuate more than stock prices because they are not controlled by one entity.

8. The price of commodities can be affected by several factors, including weather patterns, government policies, or natural disasters.

9. A commodity contract specifies the quality and quantity of product to be delivered at a specific time in the future.

10. There is no fixed expiration date for stocks – they can expire on their own if the owner doesn’t sell them before then.

Interesting Statistics or Facts of Commodity

1. Commodities are items that have been traded for a long time.

2. The word commodity comes from the Latin word “Commodus” meaning useful or convenient.

3. In its simplest form, a commodity is something you can buy and sell in large quantities.

4. Examples of commodities include oil, wheat, corn, gold, coffee beans, and sugar.

5. Oil is considered to be one of the world’s most important commodities because it fuels much of our transportation system.

6. Almost every country produces commodities but their production levels differ greatly depending on their natural resources.

Interesting Statistics or Facts of Stock

1. The Dow Jones Industrial Average is a stock market index that includes 30 of the largest and most well-known companies in America.

2. To be included on the Dow, a company must have been publicly traded for at least three months.

3. There are two major types of stocks – common and preferred shares.

4. Preferred shares typically pay dividends but they don’t offer voting rights or ownership interests.

5. A majority shareholder has more control over how a company is run than minority shareholders do. 

6. Common shares represent an equal share in a company’s earnings and assets regardless of what percentage they own.


A product that can be easily replaced by another with similar qualities. An example of a commodity is milk or grain. Stock: an item held in inventory for sale, generally at some point in the future and often on speculation rather than because it will immediately be needed to satisfy customers’ orders. An example of stock would be Amazon’s Kindle Unlimited service which allows customers access to over 1 million titles without having to purchase each one individually. A company may also have stocks of goods such as the food they are holding onto while waiting for prices to go down before selling them off-season when demand is low. The difference between commodities and stocks has everything to do with how quickly you need your products versus what you’re willing to pay for them now.


Resource 01: https://www.investopedia.com/terms/c/commodity.asp
Resource 02: https://money.cnn.com/data/markets

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