Advantages Of Trading On Equity English

Advantages of Trading on Equity

The main advantages of equity trading include potential for significant capital gains, opportunities for portfolio diversification, and access to dividend income. Additionally, equity trading offers liquidity and the possibility of owning a stake in a range of companies across various sectors.

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What is Trading on Equity?

Trading on Equity, also known as financial leverage, is the practice of using borrowed funds, often in the form of debt, to increase a company’s investment capacity. It aims to boost returns for equity shareholders if the investment yields higher returns than the debt cost.

Trading on equity occurs when a company uses borro