This article will help you to learn about the difference between commodity and stock exchange.
Difference between Commodity Exchange and Stock Exchange
1. Commodities Dealt in:
Commodity exchanges provide facilities for the purchase and sale of agricultural goods, minerals as well as manufactured goods. Stock exchange, are on the other hand, to assist the purchase and sale of securities.
Commodity exchanges are generally located in the immediate vicinity of production centres, whereas, stock exchanges are situated only in a few big cities.
3. Nature of Contracts:
In produce exchange, more spot contracts are undertaken. While in the case of stock exchanges, more future contracts are undertaken.
4. Problem of Storage:
In case of produce exchange, considerable space is required for the storage of commodities brought in it. There is no question of storage problem in case of stock exchange.
Listing is an important activity of stock exchanges. A stock exchange can deal only in the listed securities of certain selected companies. While there is no such provision of requirements in case of the produce exchange.
Any trader can be a member of a produce exchange. Whereas, only authorised traders can deal in the stock exchanges.
7. Strictness of Rules and Regulations:
In produce exchange, there is relatively less strictness regarding the compliance of established rules and regulations. While, in case of stock exchange, the rules and bye-laws have to be observed very strictly.