You hand over cash today and get a small, permanent slice of a company in return — no expiry date, no contract to unwind later.
Cash equity just means buying an actual share of a company for cash, settled almost immediately — as opposed to a derivative that only references the share's price.
You own it outright: no expiry, no counterparty who owes you anything once the trade settles. It's the plainest trade in finance.
You buy a share because you think the company will be worth more later, because it pays dividends, or because you want a vote at the AGM.
There's no clever structuring here — it's the most direct way to own a piece of a business, which is exactly why it's most people's first trade.
Pretty much everyone with a pension or a brokerage account owns cash equity somewhere. Index funds hold it in bulk to track a market; active managers pick individual names; companies buy back their own stock.
Every derivative later in this course — the option, the swap — exists because this trade did first.