Trading accounts is the first step to trade in the stock markets. It is mandatory to open a trading account. The account is for buying and selling shares and securities. An online trading account offers valuable information on the market. It intimate users on the high performing stocks and trending market scenario.
What is Trading Account
Trading account is for buying or selling securities. It is like a simple bank account. An investment dealer administers the account. An online trading account facilitates buying and selling from anywhere. An investor can have more than one trading accounts.
Types of Trading Accounts
Trading accounts not only hold stocks. It can hold cash, securities, and other types of investments. If you plan to have more than one accounts, you can segment them for smooth operation. An investor can open trading accounts for different investments. You may have an account for retirement savings, a margin account, and for day-trading. Day Trading Margin – Trading accounts are generally for intraday trading.
A Demat only facilitates retention of shares and securities. The actual transactions of selling and buying occur through the trading account. For stock trading, you need both Demat and trading account. If you want to trade only in futures and options or currency, you need an only trading account.
Advantages of Online Trading Account
An online trading account enables you to trade in multiple financial vehicles. With a trading account, you can invest in equities, currencies, forex, and others. Online trading accounts help you to operate an account from any place. It provides valuable information on trading. This immediately helps you to determine strategies for higher profits. Online access offers speedy execution of the trading. This mechanism adds transparency and safety to trading. Investors are trading without the hassle of much paperwork.
The online trading account has reduced the level of reliability on a broker. You can access your account on the go from your smartphones.
How Does Online Trading Account Works
An online trading account connects an investor with the exchange. It allows trading of shares and securities online. An investor needs to transfer funds from his bank account. Using this fund of trading account, he can buy or sell securities. He can use the trading account to trade in other instruments like IPOs, mutual funds, and derivatives. The account is valid for trading in commodities and currency. It is best to follow certain guidelines while operating the trading account. For an opening account, submit certain documents. The major ones are PAN card, proof of identity and residence.
An online trading account opening process requires at least a week. You can open an account with an account opening form. Choose the bank or brokerage firm for opening account. Submit KYC documents with your photograph. You will receive account approval after a verification. The applicant receives a kit after account approval. It contains login credentials and a unique trading account number.
Check the processing charges if any, with the brokerage firm. Keep on reading our blogs for exploring further information.
