The first step for stock market trading is to open a Demat Account and a Trading Account. Once you open a Demat Account online, you can hold all your stocks and securities here. Be it bonds, Exchange-Traded Funds (ETFs), mutual fund units, and more, every asset or security is stored here in the digital format. Now when you want to purchase and sell these securities, you can place a purchase or sell order only through your online Trading Account. So essentially you need to have a Trading Account to transact in the stock market. Any profit or loss from the transactions is accordingly credited or debited from a linked bank account.
The concept of an online Demat Account emerged with the government introducing dematerialising of share certificates. Subsequently, the open outcry system was replaced with the streamlined process of transacting through an online Trading Account. To facilitate the process of dematerialising shares and digital transactions, the National Securities Depository Limited (NSDL)was established in 1996. The process of digitising the Trading Account received a boost with the establishment of a second depository, the Central Depository Services Ltd (CDSL) in 1999. Both national depositories played a key role in developing the requisite infrastructure for a world-class Demat and Trading Account in the Indian capital market
At present, you can open the best Trading Account online effortlessly, with a reputed broker such as Motilal Oswal, and start trading with a few clicks.
A Trading Account can be defined as the account that allows you to purchase or sell stocks and securities across stock markets in the country. The key advantage of an online Trading Account is the convenience and ease of carrying transactions. You can transact online from the comfort of your home or office, or even while on the go. Besides, you don’t need to worry about any safety issues as all your transactions are encrypted and secure.
Here, you must remember that you cannot directly approach a depository, either CSDL or NSDL, to open a Trading Account online. You can only open a Trading Account through a Depository Participant (DP), who is a member of a depository. Typically, stockbroking firms in India are registered either with the CSDL or NSDL. But Motilal Oswal is registered both with CSDL and NSDL and you have the option of choosing your preferred depository while opening your online Trading Account.
Having an online Trading Account is a prerequisite for stock market trading. Once you open a Trading Account, you will receive a unique id, which will be compulsorily required for each transaction. Along with the unique id, your Trading Account is also protected via a password. To understand the functioning of an online Trading Account, let’s take an example. Suppose you want to buy 100 shares of ABC company, you will first have to log into your Trading Account by providing your password. You then need to make a purchase order. The stockbroking firm or the DP will then carry the transaction on your behalf, via your unique id. Once the order is executed and settled in the stock exchange, the number of shares will be credited to your Demat Account and the purchase price will be deducted from your bank account. Similarly, for a sale order made through your Trading Account, the number of shares will be deducted from your Demat Account and the amount credited in your bank account.
A Trading Account is a crucial link between your Demat Account and bank account. An online Trading Account can provide you with multiple advantages. Here’s a look
Wondering about the process of opening an online Trading Account? Here’s a look at the steps involved:
To select the best Trading Account in India, you must look at the services provided by a stockbroking firm. You can select from two types of Trading Accounts in the country:
Along with selling and purchasing stocks and securities, this Trading Account will provide a wide array of services such as financial advisory, stock tips, market research and so on. These stock broking firms have a wide network of offices across the country and provide both offline and online services. Remember, a full-service Trading Account can provide integrated equity and derivative Trading Account, which can allow seamless stock market trading, futures and options trading, and more.
You can choose a discount Trading Account to transact at low or minimal brokerage fees and charges. However, this type is account does not provide any additional services, including those pertaining to advisory and research.
Did you know that you can open a Trading Account with Motilal Oswal online with minimal documentation? Yes, to open a Trading Account online, you are just required to follow the easy and simple steps given below:
Visit the Motilal Oswal official website.
Fill in and submit the online application form.
submission of required documents which includes Identity Proof, Address Proof & PAN Card Copy.
Your form and documents will now be verified.
Post verification, you have to sign a copy of the agreement.
You will now receive your unique Trading Account number.
You can now start stock market trading with Motilal Oswal.
Opening an online Trading Account with Motilal Oswal can provide you with a wide range of advantages. Here’s a look:
Here’s a look at the features of an online Trading Account:
To know the difference between a Trading Account and a Demat Account, you can refer to the table given below:
|Demat Account||Trading Account|
|Function||A Demat Account is a storage account and holds all your assets electronically or in a dematerialised form.||A Trading Account helps you carry stock market transactions. To put it simply, you can purchase and sells stocks and securities using this account.|
|Nature||A Demat Account is similar to a savings bank account. For each sale and purchase, the number of stocks is correspondingly credited or debited.||A Trading Account is similar to a current bank account, where you can continuously place sale and purchase orders.|
|Role||A Demat Account keeps your dematerialised assets safely.||A Trading Account ensures safe, secure and quick transactions.|
|Charges||You can be required to pay Annual Maintenance Charges (AMC) on a Demat Account. AMC charges in Motilal Oswal is FREE for 1st Year.||You are required to pay brokerage fees and other transaction charges.|
|Account number||You receive a unique Demat number to identify your account.||You receive a unique identification number as the Trading Account number.|