What is the difference between equity and commodity trading?

Equity trading and commodity trading are the two most popular trading methods available out there in the financial markets. You would have come across anything like a Pepperstone Review. Brokerages like this will let you trade in these two markets. Let us discuss the two markets in brief in this article.

Equity trading
Equity is nothing but the shares of a company. So, equity trading is nothing but the trading activity happening with the shares of companies that are public and listed in the stock exchanges. You can buy and sell stocks of various companies as you wish by paying the required amount of money per share. You can find this type of trading in almost all trading brokerages. Usually, the company will divide its total capital into shares. For instance, if the capital of the company is 10 million dollars, it could divide it into 100000 shares of 10 dollars each. After deducting the amount that is available with the company itself, it will release the remaining shares in the market for the investors to buy. If the company holds 50000 shares from that one lakh shares, it means that 50% of the company’s shares are in the market to buy and sell. If you could afford to buy 25000 shares of that company, you will be a shareholder with 25% shares of that company. You can sell whenever you wish in the market through a brokerage.
Commodity trading
In this type of trading, you can trade commodities of some value instead of shares of companies. For instance, you can buy and sell metals, food items, and many more. You can find this type of trading in some brokerages out there. The values of these commodities will be similar to their real-life values.