In today’s online environment, starting to trade on the Stock Market is extremely simple. This article will give you a step by step guide on how to start investing in the stock market, and what you will need to do so.
The main two things you need to start investing in the stock market is a bank account and a Demat account. Once you have created a bank account, we need to focus on a Demat account.
What is a Demat Account?
Demant is a short-form for “dematerialized”. The Demat system was introduced in India in 1996. Companies issue millions of shares, and investors trade those shares daily. Previously, these records were maintained by paper records. This is an extremely cumbersome process, like printing and keeping records of these transactions requires a lot of paper, and you can easily lose those records as well.
To solve this problem, the Demat account was introduced. All records of transactions would be stored online. This means that instead of holding share certificates physically, they will be stored in your Demat account. Pretty neat right?
How to set up a Demat Account?
To set up a Demat account in India, you will need the following documents
- Bank Account
- Proof of Address (E.g: Electricity bill)
- Proof of Identity (E.g: Passport)
- PAN Card
- Cancelled check
- Broker
Now while looking for where to make a Demat account, look out for trade fees, reliability of the brokerage firm, and other account maintenance fees.
Step 1: Open a Demat account from any online website. Some examples are Upstox, ICICIDirect, Zerodha, etc.
Step 2: Link your bank account to your Demat account
Step 3: Sign in to the account, and make yourself familiar with the layout and the options
Step 4: Select a stock you want to trade
Step 5: Make sure your bank account has enough money in it for you to purchase the stock
Step 6: Put in a buy order for the stock. Sometimes, if nobody is willing to sell the stock, your trade will not get executed. Other times, the price you buy the stock might be higher than your expected price, as nobody was willing to sell it at the price.
For another perspective, you can visit this article
