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Want To Invest In Cash Trading?

By Author: Renuka Peshwani
Total Articles: 3

In India, people are like to save their money for their future expenses. The stock market provides them an opportunity to invest and earn money through it. As the growing Indian economy and purchasing power of Indians, like investing in the stock market. Over a billion, only 18 million Indians are invested in equities and 10 cities contributed to 80% of trading volume and it increases day-by-day.
A stock market or a share market is the place where trading of share (equities) is taking place between two parties, one is the buyer & one is the seller, both gets the revenue and losses in this process, This is a risk-taking process of earning money. Here trading is not only to share but also in financial instruments like commodities, precious metals, agriculture products and foreign currencies. It provides cash and future trading on the basis of delivery and provides profits if market prices are high and loss vice versa.
In cash trading, buying and selling of financial instruments are done for an immediate delivery, also called as Spot market. It trades in two options, one is in equity shares and another one is debt-bonds (Government and Mortgage bonds). Here deal is done in 2 to 3 business days. It may be Exchanged or an OTC – over The Counter. In Exchange peoples mutually buy and sell their securities and other financial instruments, on the platform of BSE-Bombay Stock Exchange and NSE- National Stock Exchange. Both have a similar trading mechanism, hours and operating principle. All major business in the country is listed on both of these exchanges.
In future trading, you can buy shares or any financial instruments at present, but its payment and delivery occur at a future specified date. Both types of trading have risk at their own levels like Cash is risky at an Intraday trading because your cash payment is done and there no way to return back if your loss, and in future is less risky in Intraday trading tips , just the opposite happens in future trading, but we can only buy in cash trading in futures not to sell.
Cash trading is done when a trader has money in hands which are different from trade on the margin where trader took credit from his broker for trading in the market. In cash, a trading trader can hold his share/financial instrument as long as he wants and face profit/loss according to market changes. Here, a possibility of earning a profit is much higher than any other method of investing. It is unfeasible in nature. But on the other hand, it has a high brokerage charge and taxes for delivery trading. It has 10 times more brokerage than marginal trading, but we can decrease this amount by opting for the online share trading portal, here we give less amount in brokerage but still more than marginal trading brokerage.
For both types of trading, investors require a Demat account as financial instruments are held in a dematerialized account instead of the investor taking physical possession of the certificate.

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