What is Spot trading?

When trades are taken and settled instantly, it is known as spot trading in the Indian stock market.

It is necessary that, these traders are booked on the spot and not on a date in the future.

In order to carry out a spot trade, a number of trading strategies are available in the market.

Your broker can also provide trading tips in order to make profit in spot trading trades.

Spot trading can be carried out in stock, currency and commodity trading.

A cash trade is another terminology used for this kind of trading.

Trading in commodities is nothing but trading in physical commodity in the spot market at the current price in the market.

The delivery price of the commodity that is priced at present in the spot exchange platform is the same as when you pay by cash and get the commodity delivered.

What is a Spot Exchange?

Here, in the spot exchange, the traders get a better price and the buyers get it for a much lowered purchase cost.

It makes a good deal for both the parties that are involved in the transaction as a large number of contributors are involved.

As there is no middle man involved in this process, it saves on any price rise due to the same.

There is transparency involved improving the efficiency and offers best price.

An account has to be opened with a reputed brokerage firm, in order to do spot trading.

The brokerage firm will guide through the process and enable trading in spot market.

What are the benefits of spot trading?

1.A lot of benefits can be availed by both the buyer and the seller.

2.The negotiation between both the parties is competitive as large numbers of buyers start the price war and hence offer the best price to both the buyers and sellers.

3. It is an accurate system which is transparent and regulated. The fear of illegal transactions can be avoided.

4.The items are handled and stored in good condition; hence the buyers can expect standard quality.

5.Arbitrage prospect is open.

6.Technological advancement enables quicker transactions.

How spot trading works?

Spot trading is the buying and selling of financial stocks and assets such as cryptocurrencies, foreign exchange, stocks and bonds. It mostly takes place in over-the-counter or exchange-based spot markets. While engaging in spot trading in spot markets in India, you can only trade your own assets. There are no margin or leverage options. In spot trading, financial assets are bought to make gains in the market with a hope that its value will rise. Remember, spot trading can be done on all asset classes, including stocks, cryptocurrencies, commodities, bonds and forex. Spot price is also known as cash price and its updating is done in real time.

How to do spot trading in enrich broking?

Enrich Broking is one of the leading brokers to provide the best financial services such as spot trading or any trading to the clients. Once you decide do spot trading or any type of trading in India, you will have access to Hunt, a state-of-the-art mobile application that meets the needs of traders. With less internet connection, faster execution, live market observations, market analysis and timely information at the right time, Hunt is the perfect guide for beginners and professionals alike.

Frequently Asked Questions

Peak Margin-Enrich

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One cannot take advantage of leverage in spot trading in India. Here, traders can only trade with assets that you already own. Leverage is only possible in margin trading and futures trading. This is because in spot trading, financial assets are traded instantly and buyers and sellers come together to trade cryptocurrencies. It should be remembered that the most important components of a spot trade are the seller, the buyer, and the order book. As soon as this order book is filled, transactions will take place immediately.

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Spot trading in India is considered an accurate system in which both parties negotiate and remain competitive. Both buyers and sellers start price competition and offer both parties the best price available. Well-regulated and highly transparent, there is no risk of illegal transactions. The risk factors for spot trading depend on the product you are trading. Imagine purchasing crude oil in spot market, you will need to take possession of the commodity.

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Spot trading is refers to transactions for immediate delivery of forex, goods, or goods at an agreed price. The exchange on which the trade takes place is known as the spot price. Spot trading in India is popular with day traders because of its low spreads and the ability to take short-dated zero-dated positions. Non-spot trading, on the other hand, is a futures-based transaction. This means that when the contract ends, you need to buy and sell the transaction on a given date and at a given price.

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In the debate between spot trading vs margin trading, most people struggle with making decisions. Spot trading in India occur at spot prices in the spot market. In spot trading, transactions are made immediately at the bid price and bid price desired by the participant. Due to their direct nature, traders must own the asset by the settlement date. Margin trading, on the other hand, is when you borrow money from a third party to increase your position. Unlike spot trading, traders do not need the full amount to enter a position while trading in margin trading. What every trader need is just asset collateral when entering a position.

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Spot trading in India is the process of buying and selling financial assets at available prices, also known as spot prices. In spot trading, the dealer receives the purchased item immediately. Day traders’ benefit from spot trading because they have access to short-term positions with zero expiration and low spreads. Futures trading, on the other hand, is a type of transaction in which the buyer and seller agree to purchase an index or derivative at a given price on a future set date. Leverage is one of the main differences between spot and futures as in spot trading, traders does not have that option.

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