Instruments
Stocks (Equity Shares)
 Stocks represent ownership in a company. When you invest in a stock, you’re buying a share of that company’s assets and earnings. Stocks offer potential for high returns but also come with higher
volatility.
- Used For : Long-term capital growth
- Risk Level: Medium to High
- Return Type: Dividends + capital appreciation
Mutual Funds
Mutual funds pool money from investors to invest in diversified portfolios managed by professional fund managers. They may focus on equity, debt, or hybrid strategies.
- Used For : Easy diversification and professional management
- Risk Level: Varies (Low to High)
- Return Type: NAV appreciation + dividends
Debt Funds
Debt funds invest in fixed-income instruments like government bonds, treasury bills, and corporate debt. They aim to offer stable returns with lower risk.
- Used For : Capital preservation and steady income
- Risk Level: Low
- Return Type: Interest income + small capital gains
Arbitrage Funds
These funds exploit price differences in the cash and derivatives markets. They aim to generate tax-efficient, low-risk returns without directional market exposure.
- Used For : Low-risk, tax-efficient returns
- Risk Level: Low
- Return Type: Short-term capital gains
Liquid Funds
These are ultra-short-term debt funds investing in money market instruments. They are ideal for managing liquidity while earning slightly better returns than a savings account.
- Used For : Emergency funds, short-term parking of funds
- Risk Level: Very Low
- Return Type: Interest income
Futures & Options (F&O)
Futures and options are derivative instruments used to speculate or hedge. Futures are contracts to buy/sell assets at a fixed price in the future. Options give the right (but not obligation) to do so.
- Used For : Hedging, leveraged strategies
- Risk Level: High
- Return Type: Capital gains or loss
Intraday Trading
This involves buying and selling stocks within the same trading day to profit from short-term price movements. It requires high precision, risk management, and discipline.
- Used For : Short-term speculative gains
- Risk Level: Very High
- Return Type: Trading profit or loss (daily)
Corporate Bonds
Issued by companies to raise capital, these bonds pay fixed interest over time. They are generally more stable than stocks but slightly riskier than government bonds.
- Used For : Fixed income with moderate risk
- Risk Level: Low to Medium
- Return Type: Coupon interest