The First Questions Comes to the mind of person How To invest in the share market when he prepares himself for stock trading. Basically you should have a clear vision what type of returns you want . Here We are giving you simple guideline that will be helpful for you for the online trading:
- Subscribe to a dealer or securities investment firm with ties to the Indian stock market. The determining factor in the recruitment of financial markets is an experience in which you invest your money. Brokers can be expensive, but tend to respond quickly to questions about individual actions.
- When a person want to buy/sell shares in the share market then he has to first place the order with a broker or can do himself using online trading systems .When you buy a share, the message is transferred to the exchange [either NSE or BSE ] and the order stays in the queue of exchange's other orders and gets executed if the price of that share comes to that value. Once you get the confirmation of this transaction, the shares purchased, will be sent to your demat account. The shares will be stored in demat account in electronic format.
What is Demat Account and Why it necessary?
The Securities and Exchange Board of India (SEBI), has made it compulsory to open a demat account if you want to buy and sell shares in the Indian share market.
- Demat (short form of Dematerialization) is the process by which an investor can get shares (also called as physical certificates) converted into electronic form maintained in an account with the Depository Participant (DP).
- DP could be organizations involved in the business of providing financial services like banks, brokers, financial institutions etc. DP’s are like agents of Depository.
- Depository is an organization responsible to maintain investor's securities (securities can be shares or any other form of investments) in the electronic form. In India there are two such organizations called NSDL (National Securities Depository Ltd.) and CDSL (Central Depository Services India Ltd.)
- Investor’s wishing to open Demat account has to go DP and open the account.
- Opening the Demat account is as simple as opening the saving bank account with any bank.
- As you need bank account to save money, deposit cheques etc, likewise you need to have a demat account to buy and sell stocks in share market and to hold the shares.