Equity Trading

Equity Trading: Equity trading is the buying and selling of company stock shares for which one needs to open a demat account. Shares in large publicly traded companies are bought and sold through stock exchanges like NSE, BSE etc. It is the process of buying and selling of shares in the secondary market with a view to profit from the difference in the buying price and selling price of the share. The share price of a stock is determined by the demand and supply of a particular share.

Trading in the Equity Market
In the equity market, investors bid for stocks by offering a certain price, and sellers ask for a specific price. When these two prices match, a sale occurs. Often, there are many investors bidding on the same stock. When this occurs, the first investor to place the bid is the first to get the stock. When a buyer will pay any price for the stock, he or she is buying at market value; similarly, when a seller will take any price for the stock, he or she is selling at market value. Equity market is divided into two parts: the primary and secondary market.

Equity trading is the buying and selling of company stock shares for which one needs to open a demat account. Shares in large publicly traded companies are bought and sold through stock exchanges like NSE, BSE etc. It is the process of buying and selling of shares in the secondary market with a view to profit from the difference in the buying price and selling price of the share. The share price of a stock is determined by the demand and supply of a particular share.

Trading in the Equity Market
In the equity market, investors bid for stocks by offering a certain price, and sellers ask for a specific price. When these two prices match, a sale occurs. Often, there are many investors bidding on the same stock. When this occurs, the first investor to place the bid is the first to get the stock. When a buyer will pay any price for the stock, he or she is buying at market value; similarly, when a seller will take any price for the stock, he or she is selling at market value. Equity market is divided into two parts: the primary and secondary market.

Different trading options available with IB such as Cash Trading, Margin Trading, Trading on BSE/NSE, Market Order and Limit Order.

Cash Trading
In simple words, cash trading is when you buy or sell securities using cash. This requires a cash account wherein you have to pay within 2 days of the purchase.

Margin Trading
Margin trading is wherein you can trade a financial asset by borrowing funds from a broker. The financial asset is then the collateral for the loan from the broker. This form of trading is risky and can either magnify gains or have devastating losses.

Market Order
A market order is when you are willing to take any price offered when your order is executed by the broker.

Limit Order
A limit order is when you set a limit to paying a maximum amount or accepting a minimum amount when buying or selling a stock.

Intraday trading
Intraday training is where you buy and sell stocks on the same day.

Delivery trading
Delivery trading is done after extensive research. In this type of trading, you invest for a longer time. It can be holding stocks for weeks or months. A trader might buy the stocks when he identifies a trend and then sell them when the trend is at its peak.

Short Sell
Short sell is when you sell shares without holding them. This is when you sell at a higher price and buy the same later, at a lower price before the market closes.

Buy Today Sell Tomorrow
Literally buying shares today and selling tomorrow in anticipation of higher rates.