Frequently Asked Questions

  1. What is Trading?

Trade in stock markets means the transfer (in exchange for money) of a stock or security from a seller to a buyer. This requires these two parties to agree on a price. Equities (stocks or shares) confer an ownership interest in a particular company.

  1. What are Futures?

Futures are derivative financial contracts that obligate the parties to transact an asset at a predetermined future date and price. Here, the buyer must purchase or the seller must sell the underlying asset at the set price, regardless of the current market price at the expiration date.

  1. What are Options?

Option is a financial derivative that gives the holder the right, but not the obligation, to buy or sell the value of an underlying index or stock

  1. What is Collateral?

A collateral amount is a form of loan against shares offered by a broker to their clients for trading in stock and shares. It is a form of an additional value-added service provided by a few brokers in India. Not all brokers offer this additional service due to the risk associated with it. In simpler words, it is providing shares in your Demat account as collateral to increase your trading limits.

  1. Why Invest?

Investing is an effective way to put your money to work and potentially build wealth. Smart investing may allow your money to outpace inflation and increase in value. The greater growth potential of investing is primarily due to the power of compounding and the risk-return tradeoff.

For example, at an annual interest rate of 8% , Rs 1,000 investment every year will grow to Rs 50,000 in 20 years. However, at an annual interest rate of 10% , the same investment will fetch you Rs 63,000 in 20 years. So, it is clear that a 2% difference in the interest rate can make you richer or poorer by Rs 13,000. And, by staying invested for a longer period, your capital will earn more money for you.