These are the 6 steps by which you can buy shares online.
Obtain a PAN card
You have to obtain a PAN card. The full form for PAN is Permanent Account Number. Obtaining a PAN number is a primary requirement for entering any form of financial transactions, across our country. It is a 10 digit alpha numeric number and a valid ID proof that is issued by the Govt. of India. The tax authorities use the PAN card for assessing one 's tax liabilities.
Open an operative demat account
To facilitate easier transition of buying and selling shares, you need to necessarily open a valid demat account. You will have a fill in a demat form online. You will have to attest the required set of documents and scan these to the brokerage company you desire transacting with. After the documents are verified in a precise manner, your demat account is opened. You can use the account to buy and sell stocks, shares and derivatives. Your demat account is the storehouse of your stock portfolio.
Get yourself a broker
If you are directly transacting with stocks or shares by going to a broker 's office, you will definitely have a broker who gives you guidance on the day to day aspects of share trading. These individuals are certified by the SEBI board (Securities Exchange Board of India) and given license to act as brokers.
In other words, a broker is an intermediary between an independent share trader and the stock broking firm. He charges a small sum as commission to help traders buy and sell shares. Brokers can also be companies or online agencies that are registered or licensed by SEBI or Exchange Board of India in order to regulate the share markets.
Depository Participant or DP
There are two types of Depository Participants in India. These are NSDL- National Securities Depository Limited and CSDL- Central Securities Depository Limited. These agencies have Depository Participants. The DP 's or Depository Participants help you store the shares you hold. They provide you with a unique account number pertaining to the same.
You cannot get confused with Trading or Demat account. Demat shows the number of shares you hold. Trading account reflects the buying and selling that has taken place in your account. It is the DP that holds the shares you have bought and releases the shares that you have sold. A broker would be taking care of all this. Yet it is better that you conceptually know what the DP or Depository Participant is all about.
Professional investors make use of UIN
UIN is otherwise known as a Unique Identification Number. UIN is mandatory for investors who transact with a capital of 1, 00, 000 and above. For usual or low key investors a UIN would not be needed. Investors usually play with the bigger innings to buy high-end blue chip stocks or to buy shares of high profile companies. Bigger innings stocks can assure you better returns on the investment over mediocre stocks. Apple Inc., Nestle, Hindustan Lever, India Cements and L& T are some of the blue chip shares you can try investing your money with.
Buying and selling shares
This is how you indulge in buying and selling of shares. Say you want to buy a share of Reliance Industries at Rupees 885, you can inform your broker accordingly. Buy Reliance Industries Ltd at Rupees 885. Quantity: 10. Even if you are operating online, you can contact the broker by dialing the toll free number or customer care number, if you do not have access to internet at that particular point of time. If you want to sell a Reliance Share at Rupees 895, you can do so accordingly. Sell Reliance Shares Ltd, Quantity: 3, Price: 895. The sale order will be processed when the share reaches that price. You can execute a stop order transaction, if you want to freeze a particular transaction on account of market fluctuations.
Learn how to buy shares through Demat. Buy shares online to sell them for a reasonable level of profit.
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