EQUITY

 Equity means ownership in the stock market when you buy an equity stock you are becoming a member of the company, You can trade your ownership daily in many forms such as intraday, margin, etc.

What is 

In the previous article, I have written about the types of trading instruments in the stock market, Today I will explain about equity, Well I have already written how the Equity market came in the existence and what is their role in the financial world, and how they work. The only thing for today is how many types of trading are there on equity.

1. Intraday trading
2. Short selling
3. Collateral
4. High-frequency trading
5. Quantitive trading 

These formats are used for trading and not for investing

• Intraday is a contract in which a trader borrows the amount of the stock that they may be buying and only give a required margin, the specification of the contract is that the broker will lend money for only one day that is if you buy stock in the morning for a given price then in the evening your stock will be sold irrespective of price. for example, you buy 100 stocks of Tata motors at 100 rs the total price of your order is 10000 and the margin is 20% that is 2000rs now If the price falls then the deposit of then the amount will be deducted from your deposit and if the price rise then you will receive the yield for 100 shares.
  
      In case 1 price rises and the profit you receive on the shares no.shares you had traded and vice versa.
• Short selling is a process in which a person borrows shares from a broker and sells them at the current market price and buy them later at the lower price in this situation if the price rises then the person will incur a loss and if the price falls then they will profit because the person has to pay later. This situation arises when a person believes that the share price is going to fall in the market. 
  
  
  
   yes, you have to pay a more 150% margin in this type of trade. You can also say that it is the opposite of intraday trade. You cant short any stock now because SEBI has banned this type of trade.
• Collateral means security for the product you are borrowing, in this case, its stocks if you are out money and you want to trade you can borrow the shares from your broker and don't have any money for margin you can just put your existing shares as collateral and trade.

• High-frequency trading(algorithmic trading) Algo-trading is the use of predefined programs to execute trades. A set of instructions or an algorithm is fed into a computer program and it automatically executes the trade when the command is met. The algorithm can be based on several input points like price, timing, quantity, or other metrics. In simple words, you just have to code and if your algorithm is correct then your computer will do millions of trades in less than an hour. HFT utilizes volumes to generate profits. A large number of orders are placed in multiple markets with multiple conditions put in place by pre-programmed instructions.

  

  source: Angel broking
  

in the above image, it shows how HFT has eliminated the speculation beyond a point, It shows that HFT has increased volatility and offer better prices. But the problem here is the same institution can destroy a market within a flash, for example, the flash crash 10 May 2010.

• Quantitative trading takes a trading technique and create a model of it using mathematics, and then they develop a computer program that applies the model to historical market data. The model is then backtested and optimized. If favorable results are achieved, the system is then implemented in real-time markets with real capital. These type of trading is done by mathematicians and scientists

With the advent of computers in financial markets, people think that they cannot overcome the trading programs well they are partially right because to beat a computer is next to impossible but the beauty of the stock market is nobody knows how the market reacts to a given set of information and very often even software fail to predict. You need to understand the market trend and growth opportunity which we at angel broking provide we even provide ROBO order service so you don't have to code for yourself.

I have covered the basics of these trades I write a blog for each type of trading. I often say that I will write in the future well that is because there is so much to learn in the stock market.

thank you for reading.