Learn How to Trade Using Demat Account

In the earlier period when the trading process was done in the paper format, the crowd and effort to bid for shares were really painful. The deal of making a trade with different traders is done through physical certificates, which exposes traders to scam or theft issues. The selling of shares certificates and preserving them in a folder. The selling of shares is also meant to follow a lengthy process.

But due to the arrival of the internet and?demat accounts, stock trading is as simple as buying products from an ecommerce website. All you have to do is click and sell your shares instantly. You buy the shares using an online method through a broker portal. As you want to buy a share this share will transfer from your trading account to your demat account. These shares can be available for trade in the stock market. A stock market is a common place to trade in equities, F&O, commodities, IPOs, mutual funds, and more. You can sell all your financial assets from anywhere you want. Furthermore, we will get to know how to trade in a demat account and what the prerequisites are for opening a demat account.

Importance of Demat account

Just like you need a bank account to store your savings and process online banking transactions. Likewise, you need to have a demat account that will secure and transfer all your financial assets in electronic format.

The demat word stands for ‘’dematerialization account. Through a demat account, traders can access trading from smartphones or desktops. Holding a demat account can solve tones of problems, which include the problems of security and managing the investments in your financial portfolio. For multiple reasons, a demat account is an essential part of trading in the stock market. There is no rule for holding demat accounts. You can keep your demat account empty or trade with any number of securities.

How to Operate a Demat Account?

With the introduction of online trading, you can log in with your ID and password on a broker platform. A depository participant who will act as a depository agent has to be selected before opening a demat account. You can open a demat account free of cost from Share India. It is important to check the DP charges and the opening charges for demat accounts. With Share India, you get low trading fees and more leverage of information and insights about the stock market. To open a demat account you need to enter your details and then submit your Aadhaar card, PAN card and photographs. You need to perform an eKYC and then wait for the approval of your demat account. You also need to read and tick on the agreed fields of the terms and conditions of your trading account.

How to Trade with a Demat account?

As you know, the importance of having a demat account is now we can look at the steps to trading in a demat account. To do this, we need to open two accounts, which are the trading and demat accounts. After opening you need to follow the steps mentioned below:

1. First, you need to download a stock broker app or login onto your stock broker website.
2. After successful login, you need to look at the market assets such as stocks, index funds, mutual funds etc.
3. Suppose you want to invest in a stock of ABC company. you have researched this company and you want to invest some amount in this particular stock.
4. To buy this ABC company stock, you need to add the required funds from your bank account to the stock trading platform. After that, you need to add the number of shares of your desired company, check your required amount and place the order to buy the shares of ABC company.
5. ?After placing the order during trading hours, you can check if the delivery of shares on your demat account was successful or not.

Through an online demat account, you can have multiple opportunities to trade and sell your holdings in just a few seconds.

Some of The Technical Terms Related to The Demat Account Are as Follows:

Stock splits: Stock splits refer to splitting one stock into two or more according to the company. This depends upon the ratio of stock split provided by the stock company.

Corporate benefits: The profit bonuses and rights announced by the companies are immediately added to your demat account online.

Bond: The government offers bonds to invest in, which come with less frequent growth but with a riskier investment.

Nomination: If the demat holder passes, he or she needs to add a nominee person. This nominee demat account will get the holding

Benefits of Trading with a Demat account

1. As we know how to trade with a demat account, now we need to know the benefits of having a demat account. A demat account provides hassle-free trading with fewer trading charges.
2. You can get access to your trade from anywhere in the world. Trading from anywhere your home, office or even travelling is possible through your broker portal.
3. Faster trade settlements. Unlike before, when settlement took weeks, now it takes T+2 days to settle your trade.
4. You can trade at a low cost. Trading online with demat often eliminates paper charges, stamp duty charges, and more to trade in the stock market.
5. You can take loans against your demat account holdings as collateral on your loans.

Conclusion

A demat account offers lots of benefits and is the most convenient way to trade in the money market. If you know how to trade in a demat account, as a beginner or an intermediate investor, you need to understand the basic concept of trading. Now, participating in any trade is not as hard as it was in the previous era. So, as a smart individual, you can make your investment work in a better way.

?