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A stock market, equity market, or share market is the aggregation of buyers and sellers of stocks (also called shares), which represent ownership claims on businesses; these may include securities listed on a public stock exchange as well as stock that is only traded privately, such as shares of private companies that are sold to investors through equity crowdfunding platforms. Investments are usually made with an investment strategy in mind.
Commodity, as defined under the English dictionary, means, “a raw material or primary agricultural product that can be bought and sold. It can also refer to material, type of produce, product, article, object, thing, artifact, piece of merchandise, etc.”
All in all, commodities are the things which we use on a daily basis and they are the items which impact our lives on a continuous basis. Simply speaking, Commodity is a group of assets or goods that are significant in our day to day life.
But, did you know we can use these commodities to diversify our investment portfolio as well. That brings us to our topic of the day “Commodity Trading”.
What is Commodity Trading?
Commodity trading is an indispensable part of the Indian financial market.
Commodity trading has been persistent in the economy way before the existence of money and money related trades. We all know this commodity exchange and commodity trading as “Barter system i.e. commodity against commodity”. We have learned in our history lessons that during ancient times our ancestors exchanged commodities to satisfy their needs from time to time.
Thus, commodity trading is very much similar to stock trading. The prime difference is the asset that is traded under this market. Under the commodity trading market, the items traded are supplies like gold, oil, crops, etc., rather than company share, bonds, and debts.
Sometimes called crypto-currency or crypto, is any form of currency that exists digitally or virtually and uses cryptography to secure transactions. Cryptocurrencies don't have a central issuing or regulating authority, instead using a decentralized system to record transactions and issue new units.
What is cryptocurrency?
Cryptocurrency is a digital payment system that doesn't rely on banks to verify transactions. It’s a peer-to-peer system that can enable anyone anywhere to send and receive payments. Instead of being physical money carried around and exchanged in the real world, cryptocurrency payments exist purely as digital entries to an online database describing specific transactions. When you transfer cryptocurrency funds, the transactions are recorded in a public ledger. Cryptocurrency is stored in digital wallets.
Cryptocurrency received its name because it uses encryption to verify transactions. This means advanced coding is involved in storing and transmitting cryptocurrency data between wallets and to public ledgers. The aim of encryption is to provide security and safety.
The first cryptocurrency was Bitcoin, which was founded in 2009 and remains the best known today. Much of the interest in cryptocurrencies is to trade for profit, with speculators at times driving prices skyward.
How does cryptocurrency work?
Cryptocurrencies run on a distributed public ledger called blockchain, a record of all transactions updated and held by currency holders.
Units of cryptocurrency are created through a process called mining, which involves using computer power to solve complicated mathematical problems that generate coins. Users can also buy the currencies from brokers, then store and spend them using cryptographic wallets.
If you own cryptocurrency, you don’t own anything tangible. What you own is a key that allows you to move a record or a unit of measure from one person to another without a trusted third party.
Although Bitcoin has been around since 2009, cryptocurrencies and applications of blockchain technology are still emerging in financial terms, and more uses are expected in the future. Transactions including bonds, stocks, and other financial assets could eventually be traded using the technology.
Cryptocurrency examples
There are thousands of cryptocurrencies. Some of the best known include: Bitcoin, Ethereum, Litecoin, Ripple
The foreign exchange market, which is usually known as “forex” or “FX,” is the largest financial market in the world.
The FX market is a global, decentralized market where the world’s currencies change hands. Due to the wide range of market participants, including central banks, financial institutions, corporations, hedge funds, and individual traders, exchange rates change by the second so the market is constantly in flux.
Only a tiny percentage of currency transactions happen in the “real economy” involving international trade and tourism like the airport example above. Instead, most of the currency transactions that occur in the global foreign exchange market are bought (and sold) for speculative reasons.
Currency traders (also known as currency speculators) buy currencies hoping that they will be able to sell them at a higher price in the future.
Compared to the “measly” $200 billion per day volume of the New York Stock Exchange (NYSE), the foreign exchange market looks absolutely ginormous with its $7.5 TRILLION a day trade volume.