If you have gone through a basic
research in how to buy and sell stocks, you might have already got a general
idea that opening a demat account and a brokerage account is essential in share trading and the foremost thing in doing so,
is to subscribe to a broker. As you directly cannot deal with the exchange in
executing orders, you have a broker who will act is the entity that facilitates
your share transactions with the exchange on your behalf.
Open a demat account
Your broker will open a demat
account that will help you in dealing with dematerialized shares. Earlier,
paper shares were the primary instruments of buying and selling of shares and
the process was needless to say very cumbersome. So, in India the dematerialized
form of share trading was introduced and it served as a big advantage to the
trades, companies and the stock exchange as buying and selling of shares were
electronically taking place and very convenient.
A demat account also goes by the
name of a depository account and it dematerializes paper share certificates into
the electronic platform. You simply need to produce the demat account opening documents and fill out a simple form provided
by your broker and get started in online stock trading.
Brokerage Account
There are two types of brokerage
account that your share broker will provide you. The first one is the
traditional account and the second one is the discount brokerage account. Both
of these accounts will prove beneficial to different types of brokers.
Whether
you are a new comer in investing or you are an experienced trader. A
traditional account will give a personalized touch in proving you with
technical analysis on stock movement and expert advice on investing. Whereas a
discount broker is only responsible of executing orders placed by you, both of
these brokerage services cater to the needs of every broker.
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