What is the difference in trading in stock and trading in future commodities?

Stock trading is trading an equity interest in a company.

Trading in commodities futures is trading in the price risk for particular commodities. If you go long or short, you are buying the right to participate in the price movement of the underlying commodity in contract quantities, for a particular period of time.

The other difference is that trading in stocks is typically a cash transaction; i.e., if you buy $10,000 in stock, you put up $10,000 to do so. Futures contracts only require small margin capital in order to participate. For instance, to buy the right to participate in 500 barrels of crude oil, you only need to put up $4000 for a contract worth $55,000. That is enormous leverage and can lead to significant one-day gains or losses on a relatively small capital base. Hence, you cannot trade commodities like stocks – you can’t buy and hold. And futures settle daily, so every loss or gain you experience is deposited or withdrawn in cold cash from your account every night.