Define Trading on Equity
In the forum of Economy and trade, the term Trading on Equity signifies the process of buying and selling of Shares and others in stock markets through one of the prime stock exchanges operating worldwide like the London Stock Exchange, New York Stock Exchange or and Bombay Stock Exchange operating in India. In our country we witness successful operation of stock markets through National Stock Exchange or NSE AND Bombay Stock Exchange or BSE. Trading on Equity comes into the picture when any organization uses its preferred stock order in order to accelerate its income on common stocks. It is used to favor preferably fixed cost capital on the basis of equity share capital thereby enhancing the income of the equity shareholders of that corporation or organization. However, this can be done only when the return of that particular corporation is comparatibly greater than the rate of interests on their borrowed capital. Prospective creditors become ready to advance funds depending on the equities presented by the owners. This trading scenario depending entirely on the equities earned it its name of Trading on Equity. Kinds of Equity Trading on Equity involves two distinct types namely- Trading on Thick Equity and Trading on Thin Equity. The former is said to take place when a company is involved in borrowing larger amounts in comparison to what the capital stock is. While on the other hand when a company is involved in borrowing in fewer amounts in comparison to what the capital stock is, it is called to be Trading on Thin Equity. Equity Trading Online The ever increasing popularity and usability of the Internet culture these days can be witnessed everywhere and in almost all aspects of our personal and professional lives. Economy and markets operations too are getting modernized and easy due to the advent of developments in technological fields of Communication and Information. Online shopping, online sending gifts, online making reservations etc all can be done at ease. Online trading too has equally become popular in this modern era of technological developments. Trading on Equity Online can be done at ease and with greater flexibility. Equity Trading in India has become widely accepted and people are becoming more and more aware of it through online sites. Online equity trading enjoys more coverage than it could be otherwise. Modern life style has become very easy and really we do not have time for even ourselves. Under these circumstances it is not possible for prospective traders to travel personally to the stock markets or run after the brokers in order to trade successfully or to collect necessary important information. At this junction in India and everywhere traders find it immensely beneficial to get hold of the latest developments in the stock markets with just few clicks of the mouse, taking the help of internet. One of the greatest positive outcomes of Online Equity trading in India is fast and efficient transfer of equity covering long distance at ease. Also payments can be done in their electronic form anywhere and at anytime.