Three segments of stock market are as follows:
A. Equity Future Market:
A Future Market is a like auction where many participants buy as well as sell the underlying contracts. This is for delivery on a particular date. Future Market is basically a collection of Agricultural Based Contracts. Future is an attempt made by mainly producers and suppliers to nullify volatile market. Two derivatives of future market areas 1. OTC 2. Exchange Traded Securities. Let’s discuss one by one.
1. OTC: - These contracts are in between two parties. This is only for delivering an underlying asset.
2. Exchange Traded Securities: These are the type of contracts that are only traded over an organized exchange such as BSE, NSE and BCX. If talking about NSE, In NSE there are around 172 shares and 10 indices as well.
This is kind of derivative security. Options are a type of contract that grants you to buy share but not an obligation so as to buy or sell an underlying asset. The question comes what is call and put. The right to buy is called call and in the same way the right to sell is termed as put option. A call option is very right thinking to deposit share for future purposes. Whereas put option is termed as an insurance policy. Those people buy options are called holders and people who sell options are called writers of the options. Options are traded on National options exchange like Chicago Boards Option Exchange. They also have fixed strikes price as well as expiration dates.
C. Equity Cash:
It is also termed as physical market. This market is for also for securities in which stocks are going to sold as well as immediate delivery of it. Even Foreign exchange market is one of the largest cash market. Cash market is different from future market in which immediate delivery takes place. Cash market transactions take place in regulated exchange as well as from the over counter. If talking about transaction such as currency forwarding, it is done by OTC market. If talking about an example of the cash market, New York Stock Exchange (NYSE) is a real-world example of cash market that is situated in the USA. This is also largest domestic cash market which is available to only domestic investors. The price of cash market is less volatile as compared to future market. The basic reason behind it is that future market carries costs such as of storage as well as insurance. One can trade in the above mentioned segments based on Stock Cash Tips from expert advisory firms like TradeNexa.