Trading Terminology

  • What is trade?
  • Who is a trader?
  • Meaning of trading
  • Types of trading
  • Where the trading takes place
  • Trading account

Trade:
In general terms the meaning of trade is buying and selling of goods or material. One can buy or sell any goods to an individual or a corporate body or company. The entire process is called trade. When such trades happen continuously and regularly then it is called trading.

Trader:
A trader is a person who does the trading or who buys and sells the goods or materials.

Trading in stock market:
When a trader buys or sells shares/securities or a commodity regularly in the stock market then it is called share trading.

Types of trading:
The stock market trade has two types of trading depending upon the way of trade. Actually the time frame is the main factor.
1. Intraday Trading
2. Delivery Trading
In intraday trading you trade or we can say we buy and sell the share the same day. The trading takes place within the day time of trading.
While in case of delivery we take delivery. We can buy today and can sell later on the next day or next week or next month but not the same day. When we are not able to sell the share the same day at a limit price it will automatically come under the delivery trading.
The trading can be done as short term, very short term or long term depending upon the strategy we opted for. The short term can be of one month, two months or six months. Very short term period refers to few days to two to three weeks while long term trading is like one to five years time and alternatively it can be called an investment so as to earn profits in the future.

Place of trading:
All trading take place through stock exchanges. This is the place where all the stocks are listed. There are brokers who help you to do trading otherwise you can do it online in the comfort of your home.

Trading account:
Any person who wants to do trading must have a trading account. This account is called Demat account. As our financial transactions take place through our bank account likewise our entire share trading transactions take place through the Demat account. The funds in our Demat account are used for buying or selling the shares and commodities.

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