Trading in Multiple Assets

Published by Sharekhan Education | July 2, 2022

Anand Sharma | Sharekhan Education

Trading in Multiple Assets

Trading is no longer restricted to a single asset class. Multiple asset trading has gained popularity in recent years as traders do not want to limit themselves. This is a win-win situation for both traders and brokerage firms, as brokers are also attempting to bring all asset classes under one roof. This article looks at the various asset classes that are offered for trading, how they work, and the opportunities they provide for both traders and brokerage firms.

A multiple asset strategy is an investment approach that involves investing in multiple asset classes. Because each asset class behaves differently under different market conditions, this provides a greater asset class diversity. Depending on their needs for a diverse investment portfolio, different investors divide assets into several classifications:

Investment in Stocks:  

Stocks, also known as equities, are entities or enterprises that have the potential to build value through time and are exchanged on a public stock exchange such as the National Stock Exchange. Stocks are further categorized as large-cap, blue-chip, dividend yield, multi-bagger, small-cap, mid-cap, and so on.

Exchange-traded funds:

Rather than investing in a single stock, traders can invest in an exchange-traded fund, which is a basket of equities listed on the stock exchange. Many forms of ETFs are available in India, including equity, gold, debt, and currency ETFs.

Futures and options trading: 

A futures and options agreement is a contract between two parties with the commitment to fulfill it on the expiry date. Because of its nature, this asset class is often known as a leveraged asset class. Traders can control the asset by paying a percentage of the order value, or premium. In reality, this product was meant for hedging, but traders used it for speculation. F&O trading is offered in India for indices, equities, commodities, and currencies.

Fixed Income:

Many investors do not want to risk losing their hard-earned money, so this is the ideal asset class in which to invest. Examples include fixed deposits, government bonds, and public provident funds. You will not lose money if you invest in fixed-income asset classes because there are no risks associated with them. Furthermore, you receive consistent returns as promised at the time of investment.

For a better understanding of different asset classes, visit us at www.sharekhaneducation.com and enroll in a Free Workshop.

By enrolling in this stock market course, a learner can learn the basics and various aspects of trading in Futures and Options.