Basic Understanding of Equity trading.

Investment Plans 07 January 2021 6:30:PM

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Equity Trading is a key asset class that can help you diversify your portfolio of assets. You need a Demat account and a trading account to trade them in. You can bid for stocks by offering a certain price once you have both in place. If this price suits the price requested by the suppliers, a trade takes place. However, the first bidder typically gets it if there are multiple investors bidding on the same stock. Before moving ahead we will take a look at what is Equity share?

Understanding of Equity Share: 

An equity share, normally known as the ordinary share is part owner of the company, where each member is a fractional owner and initiates the maximum entrepreneurial liability related to a trading concern. These types of shareholders in any organization possess the right to vote and cumulatively construct the "equity of the company", in the "stock markets". The trading in these shares is called "Equity Trading" or in normal lingo "Share Trading".

What is Equity Trading?:

Everyone knows that share trading is used to get profits, but few truly understand how it works. When you trade shares, you’re buying and selling a portion of a company on a share market (or a stock exchange). Each share has a price, which is determined by the supply and demand of a company's shares in the market and the company’s present or future performance or any news related to the same. Usually, when a company is performing well, more investors/traders will want to buy its shares and its share price goes up. Conversely, if a company is failing to deliver good profits, shareholders may decide to sell their shares.

This increases the supply, thereby bringing pressure on the share price. You can make money from share trading by selling shares for a higher price than you purchased them for or when a company pays dividends, which is a part of the profit that the company wishes to share with its shareholders.

Risk Factor in equity trading:

When a business is not doing well, the risk comes and its stock value will drop. Stocks can be easily and efficiently purchased and sold, and the behavior surrounding a certain stock influences its value. For example, the stock price continues to increase when there is a strong demand for investment in the business, and when many investors want to sell their stocks, the value goes down.

Shares are traded on a stock exchange or stock market (In INDIA two of the biggest & oldest are NSE and BSE), whose members are called "brokers". Brokers are the intermediaries that facilitate or broker deals for their clients. The brokers may recommend which stocks or sectors to BUY into for making profits, and this service is called advisory. A broker thus can be a full-service broker or an online broker. A full-service broker can give you advice about which shares to trade as well as place orders for you in the exchange. An online broker is generally only an online platform that lets you execute trades yourself.

GEPL Capital is a one-stop investment avenue with our services you can easily get expert support on your Equity trading services. open your Demat account now and place your first trade and the chance to win an exciting gift voucher. 

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