Capital is an essential requirement for engaging in trading activities. Trading involves the buying and selling of goods, services, or financial instruments with the aim of generating profits. Capital, in the form of money or assets, serves as the foundation for initiating trades.

Firstly, capital enables individuals and businesses to acquire the necessary resources and inventory to participate in trading. It provides the means to purchase goods or services that can be sold at a higher price, allowing for potential profit.

Additionally, capital is vital for managing risks in trading. It provides a buffer to absorb losses that may occur due to market fluctuations or unexpected events. Adequate capitalization allows traders to withstand short-term setbacks and continue their trading operations.

Moreover, capital plays a crucial role in accessing various markets and investment opportunities. Different types of trading may require specific minimum capital requirements set by regulatory authorities or market participants.

In summary, capital acts as a fundamental prerequisite for trading. It empowers traders by facilitating initial investments, managing risks, and unlocking opportunities in diverse markets, thereby forming the backbone of successful trading endeavors.