Before knowing about anything it is important to have knowledge about the basics of that topic and in stock market its matters a lot. So before illumination of important strategy about stock cash trading we will discuss that what is stock cash trading?
Cash trading is a term used to describe a speculator that only trades with cash on hand and does not use any margin. Stock Cash trading is an investment strategy that calls for the investor to make purchases of securities on a cash basis only. This is different from the process of trading on margin, where the investor makes use of a line of credit extended through a broker
There are different ways in which you can do stock market trading. The cash trading is one such method. Stock 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 stock 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.
Positives or Benefit of cash trading –
The biggest advantage of stock 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 stock 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 cannot invest more than what your fund permits you can control the loss effectively even if the prices get down.
Another benefit is the trader will be able to sleep peacefully at night, since odds are in your favor that you will only lose what you have put up.
Lastly stock cash trading creates methods for investing. For too often traders get ahead of themselves and become more concerned about making fast cash, than learning sound trading principles.
Negatives of cash trading –
The biggest disadvantage or you can say negatives of cash trading is of course the excited brokerage charge and taxes that you have to pay for delivery trading.
Mostly the brokerage for the stock 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 bother free way of trading in stock market that requires hardly any skill for trading and have no complications at all.
If you would like more information about how to execute the stock cash market and want to know a lot more about the dealing marketplaces and get some useful stock cash Tips to trade day-to-day…
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