The stock trading: A way to go with caution

1/02/2018 Lokesh kumar 0 Comments

For the traders in the stock market, profit is above all,and it has to be. There are some options with the help of which a smart trader can fetch hefty profit every day. However, for every trader, the strategy of the trading may differ. Some may prefer to trade in the cash segment while some may love to go for the derivatives. The traditional traders prefer to go for the cash segment, while those who have some insight of the market may go for the derivatives segment.

The best stock trading depends on one’s thinking and knowledge as well as preference. Both of these trading sections have own pros and cons that one needs to keep in mind while going for the trading in any of these sectors. If the trader prefers to have limited risk, the cash segment will be better for him,but if he has the knowledge and can depend on his research, the derivatives can prove as a golden hit. As it has a contract the chances of profit increases, if the trader can have a sure shot.

The cash segment:

The cash is a segment where there are two other options available for the trader. One can go for either intraday trading or delivery based. A trader can go for intraday trading where one needs to go for both sides of transactions in a single trading session. One who prefers to hold the position has to go for the delivery based trading where he can buy the shares on a day and sell after a few days also.
There is also another option which is known as derivatives. Here the trading differs as far as the size of the units is concerned. The trader can go for future or options where there is a contract with an expiry date. Hence the trader who has created a position needs to clear the same before the expiry of the contract.

The account:

For effective trading, the trader needs to have a trading account. There is offline account as well as online account. The offline account is one where the client can have the help of the bolt operator. He can help the client to place his orders and set various limits that include the profit booking as well as stop loss. The offline account is one where the brokerage is higher than that of the online account. The online account is one where the client is not provided with the support of the terminal operator. The terminal operator is the person who knows how to place the order of buying and selling the shares. The terminal operator proves as a cost to the service provider,and hence the service providers offer low brokerage rate to the clients who prefer to go for the online accounts. The brokers who offer low brokerage rates need to check a few things and if they feel the offering of the discount a beneficial deal for them as far as revenue generation is concerned.