Just like you have an account in a bank to manage your hard-earned money, there is a trading account where you can manage your securities trade. A share trading account is meant to purchase and sell securities online in a stock market.
Back then, traders used to gather in a trading pit and trade manually using hand signals. Soon as regulators and exchanges adopted technology, everything shifted online. In today’s blog, we will understand the nitty-gritty of trading accounts and tips to manage them efficiently.
Each trading account has a unique trading ID which is used to buy and sell securities. An online share trading account is linked with the demat account, which is in turn connected to a current/savings account. This helps facilitates trade in various asset classes like shares, bonds, ETFs, etc.
If an investor wishes to buy securities, they will place an order with the stock exchange through the trading account. Funds for the securities will be transferred from the bank to the trading account. As soon as the order gets executed money gets debited from the trading account and shares are credited to the demat account.
1. Select a Reliable Broker
This is the first step in open trading account. You must select a broker that works in good faith, reputation in the business, and does not use your funds for other purposes. The broker should be solvent enough to return your funds in times of crisis.
2. Keep KYC Updated
There are various KYC requirements by the regulators and the broker. Keeping your account updated will save you from hassle at the time of crisis. Updating details like the nominee, income range, etc. helps your broker to transfer securities in an unforeseen event.
3. Fund Your Trading Account
This is the requirement by some brokers where you have to maintain a minimum margin, failure to do so will attract charges, especially if you’re trading on leverage. Brokers do this to keep your account liquid and if you want to execute a trade quickly.
4. Use Relevant Features
Opening a share trading account will give you access to features. At times, there may be features that are perfect for your trading strategy. This is what you need to pay attention to. Use these features to get the best out of your trading experience.
If you are still wondering where to open a trading account, then we have got you covered. Dhan has a lightning-fast way to open your account. All you have to do is submit the required proofs. Some services offered by Dhan are:
● Margin Trading Facility
● Trade from Trading View
● Smart Stock SIPs
A trading account is a prerequisite to trading in the securities market. An upside to it is once you have opened a trading account it helps you to trade different securities and build your portfolio effectively.
With the onset of technology, the time to open an account has minimized and thus saves you from the hassle of physically verifying documents.
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