Equity trading means buying and selling shares (equity) of companies on the stock market. This guide explains the basics in simple terms so you can understand how it works. It does not recommend any stock or tell you whether you should trade.

What Are Shares (Equity)?

A share is a small unit of ownership in a company. When a company is listed on a stock exchange, it can issue shares to raise money. People who buy those shares become part-owners. The total equity of a company is split into many such shares. For example, if a company has 1 crore shares, and you buy 100, you own a very small part of that company.

What Is a Stock Exchange?

In India, the main exchanges are the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). They provide a regulated platform where buyers and sellers can trade shares. Orders are matched electronically. Prices move based on supply and demand. Learning how orders are placed and executed is a useful first step.

How Does Equity Trading Work?

You open a demat and trading account with a SEBI-registered broker. The demat account holds your shares in electronic form. When you want to buy, you place an order (e.g. at market price or at a limit price). When someone sells at that price, the trade happens. Your demat account is debited or credited accordingly. Selling works the opposite way: you place a sell order, and when it is matched, your shares are debited and you receive money (after charges and taxes).

Key Terms You Should Know

  • Demat account: Holds your shares in electronic form.
  • Trading account: Used to place buy and sell orders on the exchange.
  • Market order: Buy or sell at the best available price at that moment.
  • Limit order: Buy or sell only at a specific price or better.
  • Volume: Number of shares traded in a period.
  • Circuit filter: Exchange rules that limit how much a stock can move in a day in some cases.

Long-Term vs Short-Term

Some people buy shares and hold them for years (often called investing). Others buy and sell more frequently (often called trading). Both involve risk. Holding for a long time does not guarantee profit. Short-term trading can involve more volatility and costs like brokerage and taxes. Understanding the difference helps you learn; it is not advice on which approach to use.

Charges and Taxes

Brokers charge for trades (brokerage). There may be exchange charges, GST, and stamp duty. When you sell, you may have to pay capital gains tax depending on how long you held the shares and your income. Learning about these costs helps you plan. This is general information only; tax rules can change.

Summary

Equity trading is buying and selling shares of companies on stock exchanges. You need a demat and trading account. Key concepts include order types, exchanges, and basic terms like volume and circuit filters. This article is for education only and is not financial advice. Always do your own research.