Equity Trading

What is the difference between stock and equity?

Stocks and equity are used interchangeably in the trading area jargon. Equity is the ownership of the assets that may have some sort of liabilities attached to them. It can be the capital invested by the owners in a company. Whereas the term stock refers to the traded equity, it is the ownership share in a company. Investors invest in stocks of companies, which they think might get a hike in the near future.

The stock market, also known as the equity market is a trading platform where company shares are traded. Buyers and sellers meet at the platform to buy and sell shares of the listed companies. This transaction of equities for investment is called equity trading. The Indian stock market features available equities for trading at the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). features

To start with your trading account, you first should observe the market trends and try to figure out and shortlist what stock you would like to invest in. You should adopt virtual trading practices by getting dummy accounts. When you are ready, get the trading account in the share market and link your bank account to the same. Start slow and low and then slowly build your portfolio.

The different types of stocks include the Growth Stocks, yield stocks, new issues and defensive stocks. Growth Stock includes the shares that you buy for capital growth. The next is the Dividend or the yield stocks which refer to the earnings generated through investment over a period of time. The third one includes the New issues, and the fourth one is termed as a defensive stock which provides rather consistent and stable earnings.

Like all investments, investing in equities has many potential benefits, but involves risk as well. Market risks influence a direct impact on equity investments. Based on market forces, stocks rise and fall in value. So it is quite obvious that the risks are high, and an investor could potentially lose all his/her invested capital due to market risks. Equity investment fetches great returns and is an asset, but the situation should be examined from both ends. One should know equity trading strategies before enrolling in real-time trade.

Equity means a shareholder’s stake in a company. Equity is the ownership of the assets, that may have some sort of liabilities attached to them, can be the capital invested by the owners in a company. For example - if you have a house worth 100,000 dollars and you owe the bank 70,000 dollars, this is an example of having 30,000 equity.

Equity is the ownership of the assets, that may have some sort of liabilities attached to them, can be the capital invested by the owners in a company. The equity of a company can be calculated by subtracting its total liabilities from its total assets or as the total of share capital and retained earnings minus the treasury shares.

Equity in terms of trading refers to buying and selling company shares. You generally can buy equities through equity markets where businesses trade it for investment, usually money. Equity trading refers to the same. In terms of assets, it refers to the amount you possess after subtracting the liabilities. You can get equity on the later by making down payment and keeping assets in the mortgage.

Cash is not equity; it is an asset. Equity is a degree of ownership of an asset’s value after subtracting the liabilities associated with that particular asset. Simply put, equity is the difference between an asset and its liabilities. Though cash is an asset, the physical shares you buy with cash are called cash equity.