[vishnugupta]

> there is a difference between an equity valued at X and cash of X value.

Indeed, based on my readings and thought exercises this is absolutely correct.

In case of equity it is the market i.e., the collective belief of participants in the market is what is backing the value. As we see once in a while market for specific stocks could vanish leaving nothing backing that value. Where as in case of cash it is backed by the US government. That is a big difference.

For a day-to-day retail equity trader you could assume there is close to 1-1 correspondence between equity and cash. But at scale that 1-1 mapping breaks down.