What is Equity Trading in Share Market?

by Arjun Pal Student

The trading of equities takes place in the Equity Market, which is also known as the Share Market. This market is like a meeting point for all the buyers and the sellers of stocks, either in the physical or the virtual world. The equities that are traded in the market could either be the public stocks that have been listed in the stock exchange or even the privately traded stocks. The dealing of private stocks is usually performed by the dealers. Before we explore more about what is equity investment, let us get a brief idea about what equities are and also its benefits.

What are Equities?

Equities could be stated as small pieces of a company’s worth. The purchaser of the equity would become an owner of the company in the same proportion as the number of equities bought. If you are thinking about gaining huge profits through your equity purchase, you must wait for the right time when the company’s value is at the peak, and sell the equities at that time. According to that particular company’s policy, you might even receive dividends from the company. In certain cases, the equity share owner might also get a right to vote for any important decision that is being taken by the Board of Directors.

Benefits of Equities

• Diversity

By investing in equity shares across various fields based on the capitalization of the company or the equities of companies in any particular sector, one can make a strong investment portfolio. In this way, the equities will not only lend greater diversity to your current portfolio, but it will also mix the equities for getting stable as well as promising returns.

• Efficient and Easy

The entire process of trading has been made pretty easy and efficient through the use of a demat account. Any investor could invest in the equity shares of any company they wish to by purchasing or selling the shares of that particular company from your demat account.

• High Risk and High Rewards

It is not completely certain, but if the risk pays off, then the equity shares would help you in gaining huge returns. The investor would get to enjoy the appreciation of the company as well as the dividend earnings other than the profits earned through those equity shares.

Before you jump into equity investments, you must get clear with certain things to make the process easy and simple for yourself. Based on these benefits, it would be clear why you must start with equity investments.