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EQUITY/ STOCK MARKET VS DERIVATIVE MARKET

STOCK/EQUITY MARKET: – It is a kind of market, which helps companies to grow their revenue or funds by the help of public through exchanges.

By help of this companies can increase their branches, machines, products and growth. So, it helps people as well as company to earn good amount of money in terms of profit.

*More than 5000+ stocks are available to trade in Indian exchanges.

DERIVATIVE MARKET: – It derives from equity market. It is up two types FUTURES and OPTION.

*Limited number of stocks are available in futures to trade in Indian exchanges i.e. around 212.

Let’s discuss some similarity about EQUITY AND FUTURES MARKET: –

  • Both EQUITY and FUTURES market will give money at the time of uptrend movement.
  • Required margin will be block for buying stocks.
  • Same technical analysis will work for both the markets.

Difference between EQUITY AND FUTURES MARKET: –

EQUITY MARKET FUTURES MARKET
It is the actual stock market. It is virtual market.
Limited numbers of stocks are available. Unlimited numbers of stocks are available.
Need to pay 100% amount of money to buy stocks. Trader can get stocks in discounted price like 5%, 10%, 20%… 95% also.
Stock holder can hold their stocks for unlimited period of times. Stock need to sell within some predefine time period like 1 month, 2 months and 3 months
It helps to earn in one direction, i.e. when market is going in up direction. It is bidirectional; trader can earn money in both up and down direction of the market.
Allow to buy minimum 1 share. Allow to buy or sell minimum 1 lot.
Company will give dividend. Not get any dividend.
Buy and Sell names are using at the time of buying and selling stocks. Long and Short names are using at the time of buying and selling futures.
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