Considered to be proficient negotiable instrument of financial worth, securities tend to have enormous power of affecting your financial worth. Here, you will find out more about dealing with your trading account and demat account!

Role of a Trading Account

When a company gets listed on the stock market, it becomes eligible to trade its shares on the exchange. In today’s world of computers, this trading of securities is also conducted electronically. So, there’s no need for reaching a physical trading desk and placing your orders for the day! You can do the needful from your personal computer, tablet or smart phone after verifying the associated details of the desired securities, and generate your transactions accordingly. All that you need for enabling this process is a trading account.

What is a Demat Account?

In the modern technology ridden scenario, investors are not required to take possession of their scrips or share certificates physically. Rather, the shares and securities are electronically held in a particular type of account known as the demat account. So, upon registration with an investment broker, you have to open up a demat account. And yes; the demat account assigned to you is exclusively secured with a transaction and internet password.

Special Facts about Online Trading

Securities trading is a huge market and can be broadly classified into three categories: day trading, position trading, and swing trading.

  • Day traders are the most intense type of traders on the stock market and they are known to trade millions of shares on any given day.
  • Not to be perplexed with intraday trading that signifies buying and selling on a particular day; position trading is conducted by those investors who are running short of time. Such traders generally hold the shares for longer periods and wait for an upward movement of their stocks.
  • Finally, swing trading is a type of securities trading in which investors depend upon cautious monitoring, and invest their resources for understanding the technical and fundamental issues of share movements.

What’s Trending in Online Trading?

  • Along with online share trading, forex trading and commodity trading are also creating the buzz these days.
  • The essentially dynamic stock market has reached an all time high and is attracting investors like never before.
  • The foreign exchange market is a global decentralized trading market that deals with currencies. Though this trading means is subject to minute-by-minute fluctuations, it is giving good returns to its takers.
  • On the other hand, commodity trading, conducted with primary economic sectors related to products such as wheat, sugar, coffee, oil, gold, etc. is seeing an influx of investors, and how!

Opening Up a Trading Account

  • The first step is to select a good stock broker who is known to initiate orders in times.
  • The next step pertains to conducting a comparative study of available brokerage rates.
  • The third step is to get in touch with the selected best broker as per your evaluation.
  • Next, you would have to fill up two forms, an account opening form and a Know Your Client form.
  • The application forms have to be verified. Then, you will receive the details of your trading account for triggering off your security trading and other related transactions.

Dealing with Your Demat Account

Step 1: Linking your trading account and demat account is essential. By doing this, you can get rid of the task of punching in the details of your demat account every time you transact.

Step 2: The next step is about placing an order through the trading account. If your selected brokerage allows for the placing of orders over the phone, then, you would have to supply the relevant online trading details. Make sure that you know everything about demat account charges.

Step 3: Your order would get processed by the exchange that would verify the transaction details in line with the market price, shares availability, and so on. Your demat account will also be verified.

Step 4: Once your order gets processed, your shares would either be debited from the demat account or would be deposited into the same.

How to Open Demat Account?

The process is pretty simple.

First of all, select the depository participant (DP, the service provider) that you would like to work with. Then, you would have to fill up the account opening form and present the same along with the required credentials. Next, it is essential that you go through the provided copy of rules and regulations associated with the account opening formalities. During the process, a verification process would be conducted by the DP. After the process gets completed, you would receive the customer ID which you have to use for accessing the demat account. Certain associated fees such as transaction fees and maintenance fees would be necessarily borne by you. These fees would differ from one DP to the other.

The good news is that you can open up the demat account without any shares and also without maintaining any minimum balance.

Up Next Ahead!

Opening up a trading and demat account is not a big deal. Learning how to acquire maximum financial benefits from them is essential. Now that you know all about the fundamentals of securities trading, go ahead with the online transaction processes for making big gains.

Move forward with caution and grab the utmost benefits!