What's the difference between stocks and commodities?

Question

just curious. don't know much about trading..?

Answer 1

Stocks are a share (a part) of a business. Commodities are shares of tangible assets (i.e. oil, corn, electricity)

Answer 2

The first answer was good.

If you buy 10 shares in Microsoft, you have bought *stock* in a company.

Commodities, in the investment world, are products that are basically the same. When you buy milk, you don't really ask what farm it comes from ... they could have mixed the milk from 100 farms before filling your carton of milk ... you wouldn't know or likely care. Likewise, most people don't know care whether the gas in their car came out of the ground in Texas or California. Commodities like wheat, oil, minerals, etc. are an important part of the economy. They have been rising in price for several years now.

If you wanted to invest in a commodity like oil, you would have a hard time buying a barrel of oil. However, you could buy *stock* in a company that makes money from oil (such as Exxon) -- as the price of oil rises, the price of Exxon's stock will likely also go up.

Answer 3

Stocks are instruments that allow you to take ownership in a company. Commodities are more tangible and consist of things such as gold, silver, oil. Even something as simple as orange juice or pork bellies are considered commodities and are traded on the mercantile exchange.