Cash Equity

AAA

DEFINITION of 'Cash Equity'

1. In real estate, the amount of money an owner has invested in the property. If someone bought a house, the down payment would be their cash equity.

2. Another word for common stock. The cash equity market is the same thing as the stock market. It's where companies raise cash by selling shares of ownership and where investors buy and sell those shares of ownership.

INVESTOPEDIA EXPLAINS 'Cash Equity'

1. By contrast, market equity represents a property's value to its owner based on an increase in demand. If someone bought a $100,000 house with 20% down and the house was now worth $130,000, that owner would have $20,000 in cash equity in the property and $30,000 in market equity. The owner's cash equity position is stable and increases each month as a portion of his monthly mortgage payment goes towards paying down the principal borrowed. Market equity can change at any time as real estate market and broader economic conditions fluctuate.

2. The first cash equity markets in the United States were the Philadelphia Stock Exchange and the New York Stock Exchange. Investors can buy and sell cash equities through an account with a brokerage firm.

RELATED TERMS
  1. Debt/Equity Ratio

    A measure of a company's financial leverage calculated by dividing ...
  2. Shareholders' Equity

    A firm's total assets minus its total liabilities. Equivalently, ...
  3. Equity Fund

    A mutual fund that invests principally in stocks. It can be actively ...
  4. Equity

    1. A stock or any other security representing an ownership interest. ...
  5. Equity Market

    The market in which shares are issued and traded, either through ...
  6. Total Annual Loan Cost (TALC)

    The projected total cost that a reverse mortgage holder should ...
Related Articles
  1. Investing Basics

    The Changing Role Of Equity Research

    Research creates a division of labor that makes the market more efficient. Learn how its role has changed.
  2. Mutual Funds & ETFs

    Create Your Own U.S. Equity Portfolio

    Find out how to structure your portfolio so you can maximize returns.
  3. Professionals

    The Workings Of Equity Portfolio Management

    Achieve analytical efficiency by applying your evaluation to a key set of stocks.
  4. Fundamental Analysis

    The Equity-Risk Premium: More Risk For Higher Returns

    Learn how the expected extra return on stocks is measured and why academic studies usually estimate a low premium.
  5. Options & Futures

    Home-Equity Loans: What You Need To Know

    We shed light on why consumers decide to use this form of debt and whether it is a good alternative.
  6. Options & Futures

    Home-Equity Loans: The Costs

    Learn the factors to consider when comparing the different programs offered by various lenders.
  7. Bonds & Fixed Income

    Equity Premiums: Looking Back And Looking Ahead

    If stocks become less profitable in the future, you may have to change your investment strategy.
  8. Credit & Loans

    Can You Get A Mortgage On A Mobile Home?

    You can get a loan for a mobile home, but it may not be a mortgage. These are the choices for funding manufactured housing.
  9. Credit & Loans

    Getting A Mortgage After Bankruptcy Or Foreclosure

    Millions of Americans had homes foreclosed and millions more went into bankruptcy. Here are the necessary qualifying steps to buying a home again.
  10. Taxes

    Will Itemized Deductions Get You A Bigger Refund?

    April and taxes are due soon. If you need to file your return, you might have to decide if itemizing your deductions this year will net you a better deal.

You May Also Like

Hot Definitions
  1. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  2. Asset Class

    A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same ...
  3. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  4. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  5. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  6. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
Trading Center