HOW TO START TRADING IN EQUITY CASH SEGMENT ?

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There are different ways in which you can do stock market trading. The cash trading is one such method. Cash trading or equity segment trading is the most common form of share trading that is done at the stock market and major portion of the stock investors prefer to do stock trading simply because of the simple ways in which the trading can be done. The cash trading is also referred as the delivery based trading as the stocks in this type of trading are deposited to the DP account of the investor.

Advantage of cash trading – The biggest advantage of cash trading is that there is no set time limit for buying and selling the stocks unlike the margin trading and derivative trading. So when you are trading in cash segment you can hold the stocks for as much time as you want until you get the desired profit. So in cash trading your chance of getting profit from trading is more than other ways of trading in the stock market. In cash trading you have to pay the full price of the stocks that you are buying, though it may seem impractical at times, but it surely restrains one investor from going beyond the limit. As you can not invest more than what your fund permits you can control the loss effectively even if the prices get down.

Disadvantage of cash trading – The biggest disadvantage of cash trading is of course the exuberant brokerage charge and taxes that you have to pay for delivery trading. Mostly the brokerage for the cash trading is 10 times higher than margin trading. But of course you can reduce this brokerage rate by opting for the online stock trading portals where the brokerage rate is significantly lower than the traditional broking houses but then they are still higher than the margin trading brokerage.
But still cash trading is the most hassle free way of trading in stock market that requires hardly any skill for trading and have no complications at all. Therefore, for those who are new to the stock market investment and have little knowledge of the trading procedures at the market cash trading is the most suitable way of trading for them.