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How to buy and sell shares online in India

11 Sep 2023

In India, people have always been sceptical about investing in shares or equities. While most of you prefer buying gold, silver or land as these can always appreciate in value, in the future. You need to learn how to buy shares through Demat. You can buy and sell shares at a reasonable level of profit. You can source a broker to help you trade through, during the initial days. Once you become a thorough expert in buying and selling shares you can try dabbling at the stock market on your own.

The shares to buy on the stock market today are several and are generated from a huge range of companies and sectors. Once you get a hang of trading and investing, you can choose the companies you like, do some research on their backgrounds in terms of operations and past profit-making activity, and then invest. When you are a beginner, or even moderately experienced, the online scene of stock trading may entice you with “great deals”. However, with any online activity that takes place with a simple click, and especially while investing in direct equity, you should be wary of your choices and actions, as your money is on the line. 

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. Without a PAN card, hardly any financial transactions can take place in India. You need a PAN card for whatever investments you plan to make, especially if you are planning to invest in the stock market and stock-related investment channels.

How to Buy Shares Online? Open an operative Demat Account

This section will get you off to your online share purchase activity. To facilitate an 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 to 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, you can open a demat account and you can use the account to buy and sell stocks, shares and derivatives. Your demat account is the storehouse of your stock portfolio.

How to Buy Shares in a Company? 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 licenses to act as brokers. You can invest in the share market with an online broker and this is easier than going to the physical premises of a broker. These days, all brokerages, highly reputable ones, give you seamless online platforms to make your stock purchasing smooth and quick.

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. Online brokerages, in keeping with present-day advancements in technology and user-friendly applications, have all your processes conveniently available online, from setting up your Demat account and linking it to trading and bank account to giving you crash courses about how to buy shares with some useful tips and strategies online. How to buy shares in India has become easier than before with great access for everyone who has a smartphone. 

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. Essentially, a trading account helps you to undertake transactions of buying and selling shares on the stock exchange. 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. Generally, your DP may be your broker, but can also be your bank which has a dedicated Demat department and is authorised to let you open a Demat account and a linked broking account/trading account. 

How to buy shares in India? 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. The stock market offers a huge potential for investors and shares to buy are several from good and established companies. Your Unique Identification Number is something that you must safeguard at all times, as it is the primary way to identify yourself as an investor with your Demat account and other linked accounts. 

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 dialling 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.

If you want to learn how to buy shares, you can use a number of means and tools at your disposal. There are blogs you can read on all the major brokerage websites and videos you can learn from too. Furthermore, the internet is an online environment where you can take some courses on share trading and get the best advice from experts, while learning from their common mistakes.

Additionally, on your part, if you are interested in a particular company to invest in, delve into the research aspect of the company’s previous success to find out if you should buy the stock. Learn how to buy shares through Demat. Buy shares online to sell them for a reasonable level of profit. A rule of thumb is to buy low and wait enough so you can sell high.
Learn how to buy shares through Demat. Buy shares online to sell them for a reasonable level of profit.


Related Articles: Follow these 5 Expert Advices to Get Started with Investing | 5 Rules Every New Investor Must Know Before Investing | 6 Stock Market Investing Disasters To Stay Away From 


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