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Buying and selling shares in stock market
Trading and Investing differs
Demat and Trading Account is a perquisite
Share trading means buying and selling the shares of companies listed on the stock exchange with an aim to make profit.Online share trading involves buying and selling of stocks through online platform. Using the online share trading account, you may buy or sell share stocks, mutual funds, bonds, and other securities easily, without the need of intermediate broker or agent.
When you buy a share, it means you start owning some stake in the company. For example, if a company has issued 1000 shares, of which an investor owns 100 shares, it means he owns 10% stake in the company. Shareholders get a say in the company’s governance and can vote on key decisions of the company.
While this may be advantageous for those who control larger portion of company’s shares, for a retail investor, the benefit of owning a share is derived from their potential price appreciation in the share markets. Investors try making profits from share trading by selling shares at a higher price than the purchase price. But then the question arises, what causes share prices to change in the share market?
Share prices are determined by the demand and supply of the shares. If a company is expected to earn better profits, more investors flock in to own its share, leading to its price rise. Similarly, a negative sentiment about the company makes more investors to sell its shares, bringing down the price. Profit seeking investors will either buy and sell on the same day or will take a position for days before squaring it off. This brings us to the next aspect of share market trading- trading vs. investing.
Trading refers to short term buying and selling of shares. Day Trading, for example involves squaring off positions within the same trading day.
Investing on the contrary is buying and holding the shares over a longer term, which can be for days, months or years, before selling it.
In case of day trading, or Intraday trading, traders have to close the positions within the trading hours of the same day. If not closed, open positions are squared off at market closing price. But whether you want to be a trader or investor, you should be aware about the share trading time in Indian stock market.
Additional Read: Difference Between Demat and Trading Account
The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) are the two primary stock exchanges in India. The trading time for equity market in both the exchanges is between 9:15 AM to 03:30 PM, Monday to Friday.
Having covered the share trading basics; now it’s time to jump on the bandwagon and make the first move.
To start trading, opening demat and trading account is the first step. It is not possible to trade directly in the stock exchange. A stock broker registered with SEBI (Securities and Exchange Board of India) and stock exchange provides you the facility to open demat and trading account. Demat Account holds the shares in digital format and trading account helps you transact in the stock exchange. Both are essential to trade in the share market. You must have a PAN Card, Bank Account, and documents for proof of address and proof of identity to open an account.
Additional Read: How To Open Demat Account?
With Bajaj Financial securities you can open your demat and trading account in less than 15 minutes through 100% paperless process. Just follow these steps:
Visit the account opening form
Enter your personal details like name, mobile number, email, PAN Card Number
Provide your bank details and your full address
Choose an annual subscription plan.
Upload KYC documents for proof of address, proof of identity, photograph, signature on white paper, and cancelled cheque. To trade in Futures and Options, additional income proof has to be submitted.
Perform an in-person verification by recording a short video of yourself.
E-sign the form through OTP received on your Aadhar linked mobile number.
Submit the application.
After account opening, you will get the login and password.
Log in to your account and visit the Fund Transfer Section. The bank you added during sign up will be linked to your trading account.
Add money from that bank account to your trading account. (You can transfer the money back to your bank account as well)
You can create a watchlist of your favourite company, keep a track of its price and place a buy order when you want.
When you start trading, charges will be levied on your share market transactions by the stockbroker, which is a fee for the services provided. A full service stockbroker will charge a per cent of the transaction value as brokerage. They provide additional services such as stock recommendation, advisory services and customised reports, and hence the charges are on a higher side. On the other hand, there are discount brokers, which provide demat and trading account and the basic tools to help you make trade decisions by yourself. As a result, the charges are comparatively low, normally a flat fee per transaction, irrespective of the transacted value.
With Bajaj Financial Securities limited, you can get the benefit of flat fee per trade and save significantly on brokerage costs.
Share Trading is one of the investment avenues that can help in potential growth of wealth to accomplish your life goals. The more you understand about share trading, the more benefits you can draw from it.
Share trading means buying and selling of stocks of companies listed on the two main stock exchanges - Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The buyer of the shares gets the ownership in the company. He is entitled to a percentage of stake in the company. He buys it using the trading account opened with a Depository Participant(DP) or broker. The shares purchased gets stored in his Demat account.
The idea of trading is to make profits by selling the same shares at a price higher than the buying price later when the price moves.
The trader should have a trading account to buy or sell shares in the stock exchange and a demat account to store them electronically. The trading account should be linked to a bank account so that the amount can be transferred for purchase of stocks. You should have some basic knowledge of how buying and selling on the trading platform works. Also, keeping yourself abreast of the market developments will give you various trading ideas.
Share trading is beneficial to those who understand the underlying reasons for the movement of stocks and the stock market. It is considered a lucrative investment as the returns on investment is high in a short duration.
Share trading also gives you ownership of the company. Using various fundamental and technical analysis, you can search on the next good buy to hold and earn profits. Trading in the stock market is also a way to buy into the growth story of the economy and profit from the highs.
The share price of the company varies based on the demand and supply of the shares.
There can be a sudden drop in price when there is adverse news about a company.
The trader can either exit the position or hold it, based on the market performance. It may turn out to be risky if the market is not followed closely.
An online trading account can be opened with Bajaj Financial Securities from the comfort of your home within a time span of 15 minutes.
The documents required for you to open a trading account are PAN card, proof of identity, proof of address and bank details.
Open the application form
Fill in all the mandatory details like PAN details, Bank details
Upload the essential documents for proof
E-sign the form
Submit the application.
Your login details will be updated upon activation.
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