How to do Stock Trading in India?
Are you confused about how to do share trading in India? Well in this article we talk about how to do online investments in Indian stocks.
People from the world over want to come to India or take part in the booming stock market. Not only the NRI’s, but also foreign institutional investors are making a beeline to India to make money from stock trading. There are several processes involved before an individual or a company can engage in buying and selling of stocks. To get started, you need to have a clear idea of the policy as they avoid any hitches on the way.
Buy & Sell/Trade Indian Stocks: www.nriinvestindia.com
Demat account in India
You basically need to do three things before starting share trading in India. As a first step, open a demat account that would entitle you to trade in stocks. Get a trading account with a registered broker who is associated with a stock exchange, the NSE or the BSE. Even though there are many stock exchanges, the National and Bombay stock exchange are the major places where stocks are generally traded. Once you opened a demat account you are all set to trade Indian stocks/shares online.
Depending on your wish, you can opt for any of them for trading. Opening a demat account is very simple as the shares that were held in paper a decade or more ago, are now digitalized. It is like a bank account where, instead of cash, there are shares. The entire process is electronic and you can find out your holdings at the click of a mouse. For trading in shares, you need to open demat or a dematerialized account to start with. You can easily open a demat account with a bank after filling out the required forms that need an identity and address proof.
For opening a demat account, you will be charged according to the usual norms of banks. Charges can differ from bank to bank as there are annual charges for maintenance of the demat account. There are also some periodic charges that you will have to pay banks for maintaining a demat account with them. There are service charges also which are required to be paid for buying or selling a share. Even though the charges are similar, they may vary from one service provider to the other.
Trading and bank account
Charges are also specified by the securities and exchange control board or SEBI as it is popularly known in India. As soon as you open the demat account and the trading and bank account, you can start trading. You can buy and sell shares online by logging on to the broker’s site which could also be your banker. There are many bankers in India through which you can trade in shares.
You have to keep margin money and each broker has its own policy regarding the leverage they would allow. Your best bet would be to register with a broker where you can extract maximum leverage. If you can trade in higher volumes, you can keep your risk levels to the minimum. Even a fractional increase in price can offer chances of squaring up. After a small appreciation in stock price you can sell off and net a cool profit which would be reasonably good.
The sales proceeds will be credited to your bank account and in the event of losses, the money would be deducted from your balance or the margin money. When you buy shares, your demat account will swell and after selling, the demat account will reflect the shares held by you.
Share trading on the internet has become very common in India these days and many investors are wary of keeping money in the bank. Earlier, Indians had very few options apart from the interests they managed to earn on the fixed deposits with banks.