Steps to Becoming an Online Stock Trader

Becoming an online stock trader

Online trading has given anyone who has a computer, enough money to open an account and a reasonably good financial history the ability to invest in the market. Stock trading in India occurs on its two stock exchanges: the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). Just like the process to open a demat account, you need to submit proofs of identity and address along with a passport size photograph and the account opening form for opening a trading account.

Following is a detailed guide on how to open a demat account. Follow the steps given below and you’ll be a pro online stock trader in no time.

1. Select the stock broker or firm. Make sure that the broker is reputed and will take your orders in a timely manner because time is of utmost essence in the stock market.

2. Compare brokerage rates that are the fees charged by the broker for processing your orders. Discounts are given on the basis of the amount of trades conducted.

3. Note that the broker who charges the lowest fees need not necessarily be good. Contact the brokerage firm or broker and enquire about the account opening procedure.


4.  Usually, the firm would send a representative to your house with the account opening form and the Know Your Client (KYC) form. Submit the above filled forms along with two documents that serve as proof of your identity and address.

5. Your application will be verified either through an in-person check or on the phone, where you will be asked to share your personal details.

6. Once processed, you will be given your trading accounts details.  Thereafter, you will be able to carry out online stock market trading.

The use of online stock market trading increased dramatically in the mid to late 1990s with the introduction of affordable high-speed computers and Internet connections. Online stock traders place buy or sell orders for financial securities and/or currencies with the use of a brokerage's Internet-based proprietary trading platforms. Stocks, bonds, options, futures and currencies can all be traded online.

Make sure you read all scheme related documents carefully before getting into the process of online stock trading by reading all the articles and clauses mentioned in the document.

Now that you know how to go about creating an open demat account, why not take a step ahead and apply for the same.

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