Most Prominent Segment for Trading in the Stock Market?

A stock market is a place where anyone can make a huge profit at low investment and sometimes one may face losses. If you are a beginner and want to penetrate the market then you must have to understand the segments of the stock market. Basically, there are three types of segments in the stock market namely cash segment, futures segment and options segment. One can trade on the basis of Stock Option Tips or Option Trading Tips from expert technical analysts.


Cash Segment-
Cash trading is achieved by using a cash account, which is basically a type of brokerage account which requires the investor to pay for the securities within two days from the date of purchase. In layman term, it is the method of buying and selling securities in which capital is needed to fund the transaction without the use of margins.

Benefits of cash trading –
 The foremost advantage of cash trading is that there will be no set time limit for buying and selling the stocks. In the Cash Trading, one can have more chances of getting profit compared to other segments. But you have to pay the full price of stocks that you want to buy. You can not invest more than what your fund permits you otherwise you may face loss.

Futures Segment:
The Stock futures are financial contracts where the underlying asset is meant to be individual stock. It is an agreement to buy or sell a certain quantity of underlining equity share for a future date at a predefined rate, which is agreed upon between the buyer and the seller. The contacts have some standard specifications like expiry date, a method of settlement,  a unit of price quotation, tick size etc, which one has to  be follow.

Advantages of trading in futures:
Futures are highly leveraged investments. They are very liquid in nature, commissions are low, speculators can make fast money etc. but there is a disadvantage also. The word "futures" says it all. You have limited or we can say no control over many factors involved in futures investment contracts.

Option Segment:
Options are those contracts that give the right but not the obligation to buy or sell in underlining asset at a certain price on a particular date. The Stock Options are bounded by time limits. In other words, all the rights and obligation will expire on a certain date. There are two types of options call option and put option.

Advantages of trading in options:
The stock Options have great leveraging power. An investor can obtain an option position similar to a stock position but big cost savings. The stock options are less risky compared to other segments. The stock options have higher potential returns.
The major advantage of the stock options is they offer more investment alternatives. The Stock Options are a very flexible tool. There are many ways to use stock options to recreate other positions.
There are many advantages of trading in options as options trading is the best among all the segments. If you have decided to trade in options segment, you can trade on the basis of Stock Option Tips or Option Trading Tips.

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