What is Share Trading Account?
Share trading account is a virtual account which is used to purchase and sell securities in the stock market online. The stocks, as well as other securities like Mutual Funds, Bonds, ETFs can be traded online by using a trading account.
How to Open Share Trading Account?
Do you want to open a share trading account? Well, then you need to follow the following steps to get a share trading account opened in your name.
- Select Broker
The first step is to select a broker or a firm. The broker provides services with respect to buying and selling of securities apart from additional services of research and advisory.
- Compare Rates
Every broker or the firm will charge you with different brokerage rates, commission, and other charges. It is essential to understand each and every charge and compare them with other service providers. Then, based on your comparison, you may select one broker.
- Provide KYC
You will be required to provide your basic KYC documents, such as identity proof, residential proof, income proof, and other basic details.
- Fill up the Application Form
Along with the competition of KYC, you will also be required to fill up the application form.
- Verification of the Application
Your application will be verified by the broker firm, and once your application is processed and verified, you will be provided with your trading account details.
Thus, the process of share trading account opening is straightforward and less time taking.
How to Use Share Trading Account?
Once now your trading account has been opened, you may want to start using your trading account. But as a beginner, if you want to use the trading account on your own, i.e., without the aid of brokers or other experts, then you shall follow the following basics.
#1 – Learn the Basics
You must have basic knowledge of the trading terms. You can achieve the learning by way of trading books, stock market-related websites, and news channels.
#2 – Follow the Market Movements
Keep a look at the trends in the movement of the market. You can do so for the overall market as well as some particular stocks. You shall also observe as to how any news related to a company affects the price of its stock.
#3 – Broker Services
Initially, you may take the help of brokers and independent professional who may guide you for your investments in return of fees. However, one should not rely entirely on them as they may not be accurate every time.
#4 – Select Stocks
After you start the following market, you will get an idea as to which stocks are expected to do better. Based on your analysis, select the stocks you want to purchase and invest in them. You may start with a smaller amount of investments.
#5 – Stop Loss
The term stop loss order means instruction by you to your trading account that the stock shall be sold automatically when the price of the stock reaches a minimum price level, as decided by you, known as stop loss. It will help you limit your losses, being a new investor.
Why Should You Open Share Trading Account?
You need to hold a trading account to trade in various stock market instruments such as shares, mutual funds, debts, derivatives, etc. When a person holds an online trading account, he can transact hassle-free and quickly via the online platform. Nowadays, the trading accounts also come up with updated news and other features that help the investors to make well-informed decisions with respect to their investments. Also, the trading account provides you with your up-to-date financial data with respect to your holdings. On the other hand, if you carry out the share trading by physical modes, it will take too much of your time, and the cost involved will also be more.
Nowadays, most of the investors have access to share trading account, from wherein they carry out the trading transactions with respect to securities using a secure and advanced platform. Online trading accounts have made the trading process easy and quick.
This article has been a guide to Share Trading Account and its definition. Here we discuss how to open and use a share trading account and why we should open this account. You may learn more about financing from the following articles –