To buy and sell shares, equities, or funds, you need a trading account. This is the platform that acts as the security through which the stock market interacts with you. This must be linked to the bank so that you can transfer funds. The trading account now becomes the link between you and the stock market and the bank.
Use of the demat account
The demat account is the place where you keep all the stocks and share that you buy. In fact, it is the store where you keep the dematerialized stock and shares as required by the Securities and Exchange Board of India (SEBI).
Through the trading account you can share and trade all the shares of a company listed on the stock market. Previously, you had to go and buy the shares from the company physically. Now, all the processes have become electronically controlled. You can use the computer to buy and sell the stock of a company if they are listed on the stock market.
Opening a demat account
You can open the Best demat account by following a few simple steps. First, give your demat account details to the Asset Management Company (AMC) which is normally your bank or any bank of your choosing. You can choose to use a Registrar and Transfer Agent (RTA). Give a request to the Depository Participant (DP) for converting existing Mutual Fund units. Now, you can buy Mutual Fund units through the stock exchange platform.
Open a trading account
Now let us see how to open a trading account. The first step is to choose the stock broker or trading firm. When you select the firm or broker make sure that you have enough confidence in the person. You must not be taken in by any cheap firm but choose the established practitioners of trading. The change in the time will affect the outcome of the trade so you must be able to contact the broker instantly. Check the brokerage rates and choose one where you do not have to pay much.
The brokerage is the fee they charge for processing your order. This rate varies according the broker you choose. A few may give discounts if you conduct more trade. Consider all these when you choose the broker to make your trades. Choosing the broker who takes the lowest fees need not be the deciding factor.
Once you contact the firm and let them know about your interest in opening a trading account, they will send a representative to your house to fill in the Know Your Customer details. They would also give you an account opening form to fill out. Once you have submitted these two forms, you must them documents of the proof of identity and address.
The details will be checked in person or over the phone. Following this, the you will get your trading account details and you conduct trades on the stock market. Trading is simple but one must follow the best trader to be sure that you are doing everything right. This way you will not lose money on the market.