Equity trading is way of buying and selling of company shares on exchanges with the help of brokerages. One needs to open demat account to trade in equity. Equities are shares of the company which are traded on the primary and secondary exchanges of the country. The primary and secondary exchanges are also called as stock market or equity markets.
Benefit of Equity Trading with Mangal Keshav:
- Strong Research & Advisory support.
- Best In class Trading experience
- Seamless Back office support
- Competitive Industry charges.
Equity for company is way of raising money to fulfil their business requirements, where as for investors equity is an asset class which is considered to high rewarding amongst all others. Investing in equity requires Demat account and trading account. Which you can get with a seasoned broker who has been doing this service since long.
Equities are offered by the companies to the investors via IPO (initial public offering) where companies liquidate their ownership in the business and raise funds for running their business plans. Investors subscribe for IPO’s and get the shares. Once the shares are listed on primary market they are traded on secondary market too. Investors buy and sell shares on the share market and get the profit. Equity trading is one of the efficient too to secure the financial needs of the future by not curtailing your current lifestyle and needs.
Equity is most preferred asset class for investment as it provides necessary returns which are more than inflation and also beats fixed deposits and bank deposits interest rates. Apart from returns dividends, bonuses and rights are added benefit for shareholder of the company.
Equity trading in India has now become one of the most popular way of generating returns in shorter period of time. With the spread of financial technology, it has become easier for a person to invest in share market through equity trading. However, people should look for experienced broker who provides wise advice on investing in equities
Equity strategies change according to market conditions and according to companies. Investors trade in equities with respect to their risk-taking ability. Those with high risk invest in small market capitalisation companies who are yet to prove their growth but have tremendous growth potential. Those with moderate type of risk trade in medium sized companies who have shown growth signals in the past. Those with low risk prefer to trade in large companies who have proven the growth and are now big companies.
What are equity Markets?
There are two types of capital markers, one is primary market and other is secondary market. In primary market share are issued via IPO to general public. When a company decides to issue fresh equity to public they issue that stake via primary market. The equities get listed on the primary market first and then they are traded further for secondary market. National stock exchange is India’s primary market where all the share are listed primarily
In secondary market, all those equities which are listed on primary market are traded. Those investors who didn’t got those equity via IPO can purchase the shares on secondary market. Also, it is place where primary shareholder can liquidate their share to gain profit out of it. Bombay Stock exchange ( BSE) is India’s widely used secondary market in the country.
How does equity trading work?
When investor decides to buy a particular stocks, he places an order of that particular equity with the exchanges via his or her broker. The order gets registered with exchanges and when a matching Sell order has been placed the exchange executes the trade for the investor. The broker charges fees for such trades which varies from as low as Rs.0.1 paisa per Rupee to Rs.0.6 paise per rupee. These charges are solely dependant upon broker firm and the services they offer.
Once the trade is executed the settlement process is initiated. The exchanges initiate the clearing process of all trades executed during the day. The process ensures the movement of funds happen swiftly. The settlement cycle adopted by the exchanges is T+2 days. This means the buyer will get the scripts in his demat account two days after the transaction is executed. Similarly, the funds will get credited into sellers account two days after the trade execution day.
Apart from facilitating trades exchanges also ensure the investors interest and diligently follow and monitor any fraudulent activity which is not in the interest of normal investors. Such activities are identified and necessary actions is taken by the competent authority such as SEBI (Securities exchange board of India). Investing in equity trading involves high amount of risk and sometime the risk leads to losses too. Following the basic concepts of equity trading and learning from the experiences will help you book more profit in equity trading in the future.
Frequently Asked Questions
Equity in official terms means assets – liabilities. The amount raised via issuing equity by the company is equity share capital. The people who hold those, share are partly owners of the company.
Dividend is a part of net profit earned by the company distributed to the shareholders. It is an extra earning for the shareholders apart from the rise in share price.
Bonus shares are those shares issued by the company to the existing shareholders, free of cost by capitalization of accumulated reserves.
Once you have opened demat account you can place the order by either calling the broker and indicating to place order for Buying shares into equity. You can also buy shares via online share trading system provided by broker and place order using the interface.
Yes, all types of investments done into equity involve risks. The risks vary according to various factors such has investment horizon, investment class,etc.
Investors can avail loans by the broker to trade in equity markets where they might earn a higher returns with higher investments. The investors will be liable to pay the loan amount taken from broker after the trade is settled. People usually use this facility during intraday trading.
