Trading Account is a platform that helps one to place buy or sell orders in the share market.
Where Demat Account helps store the shares in a dematerialized mode or electronic form, Trading Account helps in placing the buy/ sell orders for those shares.
Technological advancement has made trading much simpler and accessible. Previously, the traders used to be present physically to buy or sell shares on the trading floor, but now one can trade in share market with just a few clicks on mobile or laptop. An investor can simply open a Trading Account with a stockbroker registered with SEBI and the Exchange, and trade through their Trading Account. This process is much faster, safer, and convenient than the traditional one.
How does a Trading Account work?
Trading Account is inter-linked with the Demat Account and Bank Account. Investor can add money from their Bank Account to the Trading Account to start trading. When an investor places an order to buy shares through his/ her Trading Account, and once the order gets executed, the shares get credited in his/ her Demat Account on T+2 days, where T is the day of transaction. Similarly, if investors sell off their shares, then shares are debited from his/ her Demat A/c.
Advantages & Need of a Trading Account
Trading Account offers manifold benefits to the investors, making the share trading ecosystem more robust and efficient. Few of such advantages are detailed below:
Informative
Investment in share market requires a great deal of information to study and research and to make a well-informed decision. The online trading platforms by most stockbrokers provide real-time news and information to the investors, such as, daily updates about the market, important news and announcements that can impact the share prices.
Besides, one also gets to see the market depth and real time price charts that help them stay on top of the market.
Access to multiple Stock Exchanges
There are multiple stock exchanges in India such as NSE, BSE, MCX, NCDEX etc. which are regulated by SEBI. Since stockbrokers are registered with SEBI and the Exchange; by opening a trading account, you can have access to trade in multiple Exchanges through the Trading Account.
Mobility & Seamless Transactions
As many trading platforms are now moving to mobile applications, it is very convenient for investors to access the app from their smartphones or similar devices and trade from anywhere and anytime.
As the process has smoothen, the placing of order or initiating the transaction has become seamless. With the help of growing technology, the whole procedure has become fast and helps the traders to save more, invest more.
Personalized Trading Experience
Online Trading platforms give you the complete authority to customize the experience according to your needs and requirements. Modifications with your on-go orders, watchlists and setting SMS and email alerts, all can be done as per your wish.
Additional Read: How To Open Demat Account?
Documents required for a Trading Account
The process to open a Trading account is almost the same across the industry. To open a Trading Account, you will have to submit the below mentioned documents:
- Identity Proof: PAN Card
- Address Proof: Either Aadhaar card, passport, driving license, voter id or last 3 months bank statement
- Photograph
- Signature with white background
- Bank Details: Bank statement with account number & IFSC code and cancelled cheque
- Income Proof: Either 6 months bank statement, 3 months’ salary slip, net-worth certificate, holding report, ITR statement or Demat holding statement
How to open a Trading Account?
If an investor is willing to start trading online, he/ she must open a Trading Account to buy or sell shares in the stock market. This whole digital concept has changed the system for good and made things smooth in terms of investment.
To open an account, you need to follow the below steps:
- The first step is to select a stockbroker where you want to open a share trading account. While selecting, you need to keep in mind that the stockbroker should be trustworthy as you will be investing your money through them.
- As every broker charge you certain amount of fee which is called Brokerage to process the orders, do compare these Brokerage rates before opening the account.
- Enquire about the procedure of opening a trading account once you are done selecting the stockbroker.
- Follow the process of opening the account as per your stockbroker. Submit the required documents and wait till the verification is completed.
- As it’s a digital process, you may require verifying your identity through IPV (In-Person Verification). In this step, you just have to record a short video of yourself to confirm your identity.
- Once the submission and verification are completed, you will receive your trading account credentials on your registered e-mail id.
You can then start trading easily.
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