Just a few decades earlier, traders and investors alike were thronging the floors of the Bombay Stock Exchange (BSE) for buying and selling shares of companies. The open outcry system was chaotic and cumbersome since you had to be physically present to conduct trades. However, all of that changed with the introduction of demat accounts.
They are electronic accounts that allow you to store the shares that you bought electronically and gave rise to online trading. And now, an online demat account is mandatory to buy and sell shares of any company. So, if you’re new to stock markets, you may not be fully aware of how to go about demat trading. If that’s the case, then this article can help you learn demat trading.
- How to begin trading with a demat account?
With almost everything being online, getting started with trading has also become quite easy. All that you have to do is follow the steps outlined below to kick off your investment journey.
1. Open a demat account
Firstly, before you go ahead and start with demat trading, you should first possess an active online demat account. There are many stock broking cum depository participants like Motilal Oswal who can help you open a free demat account within just a few minutes.
2. Link your trading demat account with your trading account
Once you’ve opened a demat account, the next step is to link it with a trading account. You can open a trading account with any stock broker. Without completing this step, you cannot purchase or sell shares on the stock exchange. Although you can hold a demat account and a trading account with two separate entities, it is inadvisable to do so. Holding both these accounts with the same entity can help you conduct trades seamlessly.
3. Place an order through your trading account
Once you’ve linked both your demat account and your trading account, the next step is to go ahead and buy a stock. To do so, you would have to log into your trading account using the account credentials given to you. Once you’ve logged in, you can search for the company whose shares you would like to purchase and place a buy order for the same on the trading portal.
The buy order that you place on the trading portal will then be sent to the exchange, where it will be executed by matching it with a sell order. Upon successful execution of your buy order, the shares that you bought will be credited electronically to the online demat account linked with your trading account. And when you wish to sell your shares, all that you have to do is place a sell order on your trading portal.
Conclusion
Now that this article has helped you learn demat trading, why don’t you go out and give it a try? Don’t already have a free demat account? Get in touch with Motilal Oswal right away to open demat account within just a few minutes.
Related Articles: How to Open a Demat Account Without a Broker | Factors to Keep in Mind While Opening a Demat account | Factors to Consider When Opening a Demat Account | 10 Points to Remember When Operating your Demat Account | Types Of Demat Account & Trading Account