FAQ's

FAQ's

Equity

Equity is a financial instrument which represents an ownership interest in a company. Investing in equity of public limited companies that are listed on a stock exchange entails acquiring the shares or stock of the company.

While equity is considered to be a high risk return investment due to the huge scope of appreciation or loss on capital as it directly depends on the company’s performance, general market conditions and the economic situation of the country, it occupies a prominent place in most investors’ portfolio.

Derivatives

Derivatives, such as futures or options, are financial contracts which derive their value from a spot price, which is called the” underlying”. For example, wheat farmers may wish to enter into a contract to sell their harvest at a future date to eliminate the risk of a change in prices by that date. Such a transaction would take place through a forward or futures market. This market is the “derivatives market", and the prices of this market would be driven by the spot market price of wheat which is the “underlying”. The term “contracts" is often applied to denote the specific traded instrument, whether it is a derivative contract in wheat, gold or equity shares. The world over, derivatives are a key part of the financial system. The most important contract types are futures and options, and the most important underlying markets are equity, treasury bills, commodities, foreign exchange, real estate etc.

Internet Trading & Online Trading

Online trading in securities refers to the facility of investor being able to place his own orders using the internet trading platform offered by the trading member viz., the broker. The orders so placed by the investor using internet would be routed through the trading member.