Commodity Account
Commodity Account means an account maintained by a Commodity Intermediary in which a Commodity Contract is carried out for a Commodity Customer.These assets could well be stocks, currencies, bonds, commodities, etc. As the prices of commodities have shifts and movements that are different from stocks, traders and investors make use of trading in commodities as a countermeasure to ward off inflation and its effects.
Equity refers to a shareholder’s ownership in the company. It is the amount that a shareholder will receive after deducting the liabilities from the company’s total assets. Whereas commodity refers to the raw materials such as cotton that can be bought and sold in quantity.
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Since there are so many commodities, they are grouped into three major categories: agriculture, energy, and metals.
Definition of supply and demand
: the amount of goods and services that are available for people to buy compared to the amount of goods and services that people want to buy If less of a product than the public wants is produced, the law of supply and demand says that more can be charged for the product.
Commodities are traded on certain exchanges, and traders aim to profit off the changes in the commodity market by buying and selling these commodities. Commodity trading for beginners can be made easier with Contracts For Difference (CFDs), which is one of the most straightforward trading options in commodities.
Equity investment is more likely to suit long term goals while the commodity market can be a better choice for investors eyeing short term gains. Therefore an investor most importantly should keep in mind the basic difference of ownership and holding time frame between equities and commodities.
Gold is a commodity that has always stood apart, but there have been recent market developments that build on its existing differentiators while illustrating the importance of its role in a portfolio.