Share trading and opening a demat account

There is no thumb rule to gain huge returns from a stock or determining the direction, as to where the stock market is headed. There are a few principles or rules that will help you in making the right choices in share trading.

Never expect to put your money on a winning stock from sources like investing experts, close ones or rumours surrounding the market. Ones or twice such market tips may prove useful, but it will seriously limit you in being a successful investor, as investing is done through research and analysis of stocks and the market. Luck has never helped anyone in achieving success in share investing.

Investors generally like to cash out their investment which has doubled or tripled in appreciation and keep stocks which are going down in hopes of a revival. But to be successful, you have to be different. To be a long term investor, you should check your temptation of selling performing stocks and try to ride on a winner to seek long-term benefits and quit holding non-performing stocks and risk your stocks to plummet further, making it completely worthless. You should always invest and make choices rationally and not by hope or greed.

A demat account comes first in line when it comes to share trading. A demat account is almost synonymous to trading and it can now be easily opened with a stock broker. A stock broker is a financial intermediary along with others like a bank who are entitled to open a demat account for you through a central Depository like the CDSL (Central Depository Securities Ltd.) and NDSL (National Depository Securities Ltd.)

Different brokers offer a wide variety of stock trading services to their customers. It may include requesting order executions online, call and trade facility, in which you can also place your order if you are not online. Expert analysis on the market, live updates, advisory services etc.

Some of the documents you need to open a demat account are as follows:

     1)      Photocopy of your PAN card.

     2)      Residence proof (Driving license/passport/ration card etc.)

     3)      6 months bank statement.

Opening a demat account and trading in shares has never been so simple. Just fill out a simple form and provide all the necessary documents required in opening a demat account and then you can start investing and create wonderful financial opportunities.        

Open Demat Account for Better Trading

A Demat account in India enables an investor to buy and sell stocks list in the exchange and hold shares and securities electronically rather than in the physical form. The Securities and Exchange Board of India (SEBI) has made it absolutely necessary for all retail investors to open a Demat account, to trade in the equities market. The Depository Participants (DPs) are empowered by SEBI to provided services to the investors trading in securities, to convert physical share certificates into dematerialised shares. Your shares and other securities will get electronically held in your demat account, rather than you acquiring physical certificates of the shares.

There are many benefits regarding the opening of a demat account –

• De-materialised shares are safely and conveniently held in a demat account.
• Stamp duty is not levied on the account holder, while transferring of shares.
• 100% safety and hassle free way of buying and selling of shares and securities.
• Many broking companies opening a demat account generally do not charge, for opening an account.
• One can easily browse the internet for genuine brokers and the variety of demat account charges and services offered.
• Just like you can de-materialise shares, you can also re-materialise your shares into physical shares.
• Most broking companies provide trading platforms with effortless buying and selling of shares and securities.
• With live market updates, expert analysis and portfolio management are offered by broking companies with demat account.

The need for a demat account is all the more important, for the many pitfalls and limitations that physical shares has. Your physical shares may get displaced at the time of transition from one place to another, can get easily burned in case of fire, if you don’t get your signature right, then it becomes very difficult in trading etc. And perhaps this clarifies why holding shares electronically in a demat account is better than the paper form.