Proprietary Trading and Stock Exchange

A trader or an investor usually is an entity that is registered under a specific stock exchange or financial marketplace for kinds of trading activities. Unlike earlier times, the trading floor concept is slowly out of fashion and more and more people are relying on online trading platforms. This provides for an ease of trading and is quite transparent as well. Most of the companies list their shares or stocks on the exchange and a trader or investor can decide upon which one to select on the basis of various factors including the growth curve of the particular company.

All about Proprietary Trading

Also known as prop trading, proprietary trading is a state or condition when a trading desk at any stock exchange or similar authorised entity, make use of the firms’ resources like capital and balance sheet to perform self-promoting financial transactions. There are many remote proprietary trading firms in India that aims for direct investment gain rather than envisaging commission. The firms who are into this often has an illusion that annual return will be higher than the index investing. Similar to regular trading, proprietary trading can also be done with multiple kinds of assets including the likes of stocks, bonds, commodities etc. A trader in Delhi involved in this kind of trading has some benefits as follows:

• A comparatively higher annual as well as quarterly profits
• A proprietary trading firm can easily secure an inventory of assets or securities
• As the firms have a benefit of stockpiling the assets, they can act as market decision maker by offering liquidity of certain assets

Definition and Role of Stock Exchange In Trading

As the name indicates, a stock exchange is a common marketplace where buyers and sellers come together to facilitate trade or investment in stocks. Each country at least has 1 stock exchange and on a global scale New York Stock Exchange or NYSE is the largest stock exchange followed by NASDAQ. So basically, a stock exchange brings companies and investors all under one roof. By selling shares or stocks, a company can earn profits and revenues and by investing in a company’s stocks will result in a share of that profit to the investor or trader. Therefore, all the stocks that are up for sale must be listed under stock exchange of the specific country. The foreign exchange market in Delhi is a place where you can easily convert or exchange a foreign currency for the local ones. This is known as forex trading. Unlike shares and stocks, currency trading is done in pairs and hence the exchange rate is applicable in forex trading. The exchange rate for a specific currency usually has 2 components which is buying and sell rate. Like stocks are piled under stock exchange, a financial market has all the currencies listed along with their fluctuating buying and selling rate.

Stocks, shares, forex, commodities etc are all tradable assets that can be utilised to make profit in the business, but like any other business deal, this too involves high probability of risk, that must be properly analysed by a trader.