Equity Trading in India - An Overview

Equity is primarily the ownership in any kind of assets after all the debts related to it are paid off. Any asset that has no outstanding debt associated with is the equity of the owner. A purely financial resource, equity is what a person owns that can be converted into cash. Shares are a form of equity and equity trading is the transaction of company shares. The buying and selling of company stock shares is predominantly known as equity trading. Equity trading roots out debt trading and usually finds its identity in public markets, both domestic and overseas. Equity and stock trading are often used alternatively.
An equity trading is quite similar to stock trading where the trade can be placed by owner of the shares, through a brokerage account, or through an agent or broker. But the primary difference between equity trading and stock trading is the way they are invested and their management firms. With technology getting fiercer with time, equity trading procedures are also carried out more technically. These days, equity trading now goes through electronic matching of buying and selling orders. Also, in other terms equity trading is also referred to warrants, options and convertible preferred stock. They can either be traded on a long term basis or short term period.
There are various kinds of equity that all investment or financial fanatics must take note on, in order to get a clear overview of how to go about them, in order to play safe!
  • A common stock or ordinary share is the most prevalent kind of equity investment. Common stocks owner are benefitted if the business accrues profit and get their share once the stake holders and the creditors are paid off.
  • A preferred stock or preference share is more or less like bond stocks that offer specific payments on specific dates. In most cases, investors prefer preferred stocks because there are tax advantages associated with it.
  • Convertible preferred stocks are quite similar to convertible bonds that can be converted into common stocks under certain specified conditions, sometimes at a given price or a time period.
  • Warrants is a way to offer the owner to buy a firm’s common stock during a specific time period at a given price which is usually called the exercise price or strike price.
  • Issuing shares or freely traded shares are owned by an individual; investors like partners or enterprise capitalists or established firms.
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