Before letting you on about the difference between a demat account and a trading account, first we would begin by throwing in a few details about how the stock market works. In simple words the stock market is a commercial hub. Here, the companies that are registered to conduct stock exchange, commence the process with a public offering against the stocks that the companies wish to sell to potential buyers. This is followed by bidding and the buyer acquires a stock after a final price is negotiated between the buyer and the seller.
Why do you need a trading account?
So, as has been aforementioned, whenever a company gets registered with the stock market, its shares become automatically open to the public. In other words, the public can now trade in these shares on the stock exchange. In earlier days before the advent of technology, bidding used to be a chaotic affair full of hue and cry. But, today, thanks to computers and the virtual realm, you can easily gather details related to stocks like the market price, and the ensuing trade process from within the comforts of your home or your work place. However, in order to get the privileges of the stock market, you must open a special account, called a trading account, first thing, that will allow you to conduct all the transactions. You can open a trading account conveniently, online. On opening the account you will receive an exclusive ID that will be used for trading.
What is a demat account?
If the trading account acts as a license to all your transactions, a demat account works as a wallet, where all the stocks that you buy get deposited. And if you are selling a stock of your own, this same demat account is used, from where the stock is picked up and sold.
Opening a trading account and a demat account online
A trading account can be opened online very easily. Use your discretion while choosing a firm. Compare the brokerage charges and make sure that the broker acts as soon as you place an order. One you choose your broker, you have to contact the responsible person who will collect all the personal details from you, like your PAN/Aadhar card details, address proofs etc. This will be followed by a verification process, after which you will get the trading account details, and, you are all set to conduct transactions.
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Likewise, you can also open demat account online. You simply need to link your demat account to your trading account and all the details pertaining to your trading account will be accumulated through the linked demat account. You can also open demat account online and ascribe a nominee to it. The nominee will receive all the securities of your demat account in case you are no more to claim it.
Why do you need a trading account?
So, as has been aforementioned, whenever a company gets registered with the stock market, its shares become automatically open to the public. In other words, the public can now trade in these shares on the stock exchange. In earlier days before the advent of technology, bidding used to be a chaotic affair full of hue and cry. But, today, thanks to computers and the virtual realm, you can easily gather details related to stocks like the market price, and the ensuing trade process from within the comforts of your home or your work place. However, in order to get the privileges of the stock market, you must open a special account, called a trading account, first thing, that will allow you to conduct all the transactions. You can open a trading account conveniently, online. On opening the account you will receive an exclusive ID that will be used for trading.
What is a demat account?
If the trading account acts as a license to all your transactions, a demat account works as a wallet, where all the stocks that you buy get deposited. And if you are selling a stock of your own, this same demat account is used, from where the stock is picked up and sold.
Opening a trading account and a demat account online
A trading account can be opened online very easily. Use your discretion while choosing a firm. Compare the brokerage charges and make sure that the broker acts as soon as you place an order. One you choose your broker, you have to contact the responsible person who will collect all the personal details from you, like your PAN/Aadhar card details, address proofs etc. This will be followed by a verification process, after which you will get the trading account details, and, you are all set to conduct transactions.
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Likewise, you can also open demat account online. You simply need to link your demat account to your trading account and all the details pertaining to your trading account will be accumulated through the linked demat account. You can also open demat account online and ascribe a nominee to it. The nominee will receive all the securities of your demat account in case you are no more to claim it.
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