The online stock trading trend has picked up pace in India. With rising retail participation, more and more individuals open trading accounts in India. The credit goes to this internet era and internet-based trading systems in India.
What is a Trading Account?
An online trading system involves trading financial assets through an online trading platform provided by a stockbroker. A trading account allows you to access this trading platform. When a company lists its demat shares in the stock market, these can be traded electronically only through trading accounts. Demat meaning in stock trading is dematerialised (electronic or digital) form. Therefore, it is a must-have account to carry out any trade in the stock market through the stock exchange.
A trading account connects your demat account and bank account.
- With your buy order through your trading account, your demat account gets credited with the bought securities. You need to transfer the transaction amount from the bank account to the trading account to initiate a trade.
- With a sell order for a certain number of securities, your demat account gets debited with the same securities, and your bank account gets credited with the sale proceeds and booked profit.
It allows you to make multiple trades within a trading day. Depending on your market knowledge and trading style, you can take and exit as many positions as you want.
How to open a Trading Account Online?
You can open demat account along with trading account online at the same time. Here are the easy steps to follow:
Step 1: Visit the broker’s official website and access the account opening form.
Step 2: Provide required personal details, like, your name, Email ID, mobile number, date of birth, etc.
Step 3: Enter your residential address and bank account details.
Step 4: Upload the digital copies of the required documents.
Step 5: Choose a subscription plan. You can open a free account with specific plans. These plans are available for beginners and professionals with unique features at affordable costs that allow you to save on investing and trading costs.
Step 6: Record a self-declaration form to complete the verification process.
Step 7: Verify the OTP sent on your Aadhar-linked mobile number to e-sign the form.
Step 8: Submit the application. The broker will send you a confirmation message regarding account activation. Using the login credentials sent by the broker, you can use your trading account and start trading in the stock market.
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- Applicant’s PAN card
- Address proof: Driving License/Passport/Previous two months’ Utility Bill
- Bank and income proof: Bank statement of previous six months, Bank passbook, Form 16, and latest salary slip.
After completing the verification process, the broker allocates a unique trading account ID that is used to make trading transactions. Make sure you open your trading account with a broker registered with the Securities Exchange Board of India (SEBI).
What Benefits A Trading Account Offers to Investors
- One-point Access to Multiple Exchanges: You can easily access multiple exchanges in India, the National Stock Exchange (NSE), the Bombay Stock Exchange (BSE), Multi Commodity Exchange (MCX), and others, to trade various securities and commodities.
- Flexibility to Use: You can trade using your trading account on the web-based platform or mobile application offering greater flexibility to trade anywhere.
- Reliable Information: Stockbrokers provide research reports to their clients. These reports are prepared based on expert views that can help investors to make prudent investing decisions. You should check the quality of these reports while choosing a stockbroker.
- Seamless Transaction: Your trading account is linked to your demat account and bank account to speed up the trading process. Your trade placed on a stock exchange can be settled within two days of the transaction date following the T+2 settlement process.
- Safety: Each and every trade placed on a stock exchange is executed under the surveillance of the SEBI. You need not worry about fraudulent activity.
Thus, now, investors need not panic to place trade orders on ground-based exchanges. You can complete the trading transactions online. Just open your trading account with a registered stock broker.