Stock market | What is Cash equity in Stock market

February 21, 2021
Alok Kumar
Stock market | What is Cash equity in Stock market

What is Cash equity in the Stock market?

The liquid portion of any investment that could be easily redeemed as cash is known as Cash equity. However, investing refers to the Stocks issued to the public and the institutional trading of stocks. Stock market

Cash equity trading is done by Giant institutional investors. These giant companies trade in stocks on the behalf of their customers and trade for themselves too. Stock market

Equity Shares of a company represent the ownership of the company. In this one can purchase and hold the stocks for long-term investments, and can also trade the stock in a shorter period to make a quick profit. Stock market

Cash equity trading lies under the short term-trading category. Work for quick and large profits from market fluctuations. Stock market

What are the future and options? Stock market

The future and options are the major type of stock derivative that get traded in the stock market, future and option are both financial products which are used to hedge current investment or to make money. Stock market

An option contract gives investors the rights but not the obligation for buying and selling stocks at a specific price at any time, as long as the contract is attained. Every buyer requires a future contract to buy and sell stocks on a specific future date until and unless the holder’s position is closed before the expiration date. Stock market

Future and option both are financial products, which a user can use to hedge current investments or to make money.

Stock market | What is Cash equity in Stock market

Stock market | What is Cash equity in Stock market

What is Commodity trading?

The market in which trading of precious metals, energy, oils, spices and so is done is known as a commodity market/Trading. A commodity is a group of assets and goods, which are important in our daily life like food, energy, metals. Stock market

Commodity trading was started in India a long time ago, even before it started in other countries. However, there are many other forms of trading available but still, commodity trading has gained its importance.Stock market

Where to invest in commodities?

The six major Indian commodity trading exchanges are listed below

  1. Multi Commodity Exchange – MCX
  2. National Commodity and Derivatives Exchange – NCDEX
  3. National Multi Commodity Exchange – NMCE
  4. Ace Derivatives Exchange – ACE
  5. The Universal Commodity Exchange – UCX
  6. Indian Commodity Exchange – ICEX

How to Invest in Commodities?

Future contracts are the best way to invest in commodities it is a contract/agreement to buy or sell a specific quantity at a fixed price later. These contracts are used by traders as prevention toward risk equate with the future price swing. Stock market

Advantages of futures:

  1. Futures are highly purchased investments
  2. Future markets are liquid in which buying and selling are easy
  3. If trade carefully then future give huge profits
  4. Both long and short futures can be set as targets easily.

Disadvantages of the future:

  1. For novice traders making a direct investment is highly risky.
  2. Profit and losses are enhanced by the purchase
  3. Future markets are volatile
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