Stock or share trading is luring. After all no other form of investment can promise you as much returns. Thanks to digital technology you can now buy and sell stocks at will sitting in the comfort of your home using your computer or even while in your office using a mobile app. Here we shall take you through a basic guide in buying and selling stocks online in India –
- Find a Good Broker – You cannot buy and sell stocks directly from the stock exchanges and would need a broker to trade on your behalf. From small neighborhood brokers to large financial houses you find brokers at all levels in India. Choose a broker taking into account two things – first their reputation in the market and availability of online trading platform and secondly the brokerage or charges you’d pay them, the lesser the better.
- Open Demat & Trading Account – You will next need to open a Demat and Trading account. Demat account shows the shares you hold once you buy them while the trading account shows buying and selling activities. Some brokerage offers you a 3-in-1 account which includes a Bank Account along with the other two. This is advisable for first time traders as this will help you separate your trading capital from savings or salary. You’ll need to provide your PAN Card details, address proof, bank account details etc. for opening Demat and Trading account.
- Types of Trade – You can choose between Intraday aka MIS (Margin Intraday Square) or Delivery aka CnC (Cash and Carry) trades. In the former you’d buy and sell the stocks in the same session and not take delivery into your Demat Account at the end of the session. In the latter you take delivery of the stocks after the day’s trade and can sell them at a later day.
- Buying Stocks – Once the market opens you’d see the prices of various equities. They’d keep changing from time to time depending on their demand or selling activities. You can buy them at the current price levels or bid for them at lower prices. Your stocks would be bought once the price falls to your bid levels subject to availability of stocks you have bid for. At the end of the day you’d get those stocks at Price x Number of Stocks + Brokerage.
- Selling Stocks – It is similar to buying where you can either sell them at the current price during the trading session or quote higher price and it would be sold once price reaches that level. Here you’d get Price x Number of Stocks – Brokerage. This money would be held in your trading account for few trading days before it is credited to your linked bank account in case you don’t use them for further trading activity.
It’s easy, isn’t it? But you need to do your research while buying and selling stocks or join stock market courses for beginners as they would help you understand the risks in stock market trading and mitigating them.
Summary – In this write-up we take a look at how you can buy and sell share online in India and how to get started with it.