What are Margins in Stock Market, ఇది శాపమా లేదా వరమా?
Margin Trading
Margin trading refers to the process of trading where an individual increases his/her possible returns on investment by investing more than they can afford to. Here, investors can benefit from the facility of purchasing stocks at a marginal price of their actual value. Such trading transactions are funded by brokers who lend investors the cash to purchase stocks. The margin can later be settled when investors square off their position in the stock market.
In this respect, margin trading provides investors with access to higher capital for investment, thus helping them to leverage their position in the market, either through security or cash. Subsequently, this trading helps to boost results, so that investors can earn higher profits on successful trades.
However, this trading can be quite risky, and investors can earn a profit only when total profit earned is higher than the margin.
SEBI Regulations Regarding Margin Trading
Up until recently, margin trading in India was allowed only through cash, while providing shares as collateral was restricted. However, under fresh regulations put forth by SEBI in 2018, investors can leverage their market position through margin trading by providing shares as security.
Further, margin accounts can be offered only by authorised brokers, according to regulations put forth by SEBI. Continue reading “What are Margins in Stock Market, ఇది శాపమా లేదా వరమా?”
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Chicago Mercantile Exchange (CME) or “Chicago Butter and Egg Board”
Commodities Trading: An Overview
Commodities are an important aspect of most American’s daily life. A commodity is a basic good used in commerce that is interchangeable with other goods of the same type. Traditional examples of commodities include grains, gold, beef, oil, and natural gas.
For investors, commodities can be an important way to diversify their portfolio beyond traditional securities. Because the prices of commodities tend to move in opposition to stocks, some investors also rely on commodities during periods of market volatility.
In the past, commodities trading required significant amounts of time, money, and expertise, and was primarily limited to professional traders. Today, there are more options for participating in the commodity markets.
KEY TAKEAWAYS
- Commodities that are traded are typically sorted into four categories broad categories: metal, energy, livestock and meat, and agricultural.
- For investors, commodities can be an important way to diversify their portfolio beyond traditional securities.
- In the most basic sense, commodities are known to be risky investment propositions because their market (supply and demand) is impacted by uncertainties that are difficult or impossible to predict, such as unusual weather patterns, epidemics, and disasters both natural and man-made.
- There are a number of ways to invest in commodities, such as futures contracts, options, and exchange-traded funds (ETFs).
Continue reading “Chicago Mercantile Exchange (CME) or “Chicago Butter and Egg Board””