Two Important Segments of Stock Market

Posted on Posted in Stock Market

If you have just started trading. And you are bit confused between the cash and future segments of the stock market. Then you have arrived at the right page as in this post. You will get to know the two different segments of the stock market. Stock market is broadly speaking divided into 2 segments which are

Cash segment and

Derivative segment- Future and Option

The investors, who participate in the cash market can buy or sell any number of shares of a company. However, if you trade in the derivative segment, i.e the futures and options segment. Then you can buy contracts which have a pre-determined lot size depending upon the underlying stock.

Here is the example with the help of which you can better understand the difference between the two segments.

segments
Two Important Segments of Stock Market

Suppose, you want to buy Infosys futures contract that has a lot size of 125 shares. Then it means you are buying 125 shares of Infosys.

Suppose you want to buy an IDBI futures contract that has a lot of 4,000 shares. Then it means you are buying 4000 shares of IDBI.

The ton size is preset for every contract and it differs from stock to stock.

In the cash segment, you must pay the full price to buy a share. But in case of the futures and options segment. You pay a fee called the premium while buying option lots. And if you are buying future, lots then you need to pay. An “Initial Margin” amount which is a fraction of the total price of the underlying share.

If you want to trade in stock future segments then immediately get in touch. With the technical analysts of Money Classic Research, who are professional providers of accurate stock future tips, free intraday day tips, and intraday tips.

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