Thursday, January 29, 2009

Trading Account

What is a Trading account ?
Trading account has to be opened if you wish to trade on the stock exchange. The two main stock exchanges in India are Bombay Stock Exchange (BSE) and National Stock Exchange. There are charges included for opening trading account. And for trading there are brokerage charges. After opening trading account the trading can be done through phone or internet. Trading through internet will be convenient as you can specify the price for which you have to buy or sell, also it is easy to track the status.
What is the difference between Demat account and Trading account ?
Demat account is just to hold shares. Trading account is by which you can buy or sell shares that is do trading. After doing transaction, that is buy or sell, the same has to reflect in your Demat account. This will mainly be done on T+2 basis, that is after 2 days of your buying shares the same will reflect in your Demat account.
Is it required to open both Demat account and trading account at one place ?
Not necessary, but it is good so that the transfer of amount and share takes place easily. For example, while selling a share you log into your trading account and specify all the details of the share, then after executing the trade the shares will be debited from your Demat account and amount is credited into your bank account if you have all the three accounts with the same organization. Suppose if your bank account is with different organization than the trading account, then you will have to move the amount from the trading account to the bank account.
How many Demat account can an individual open ?
There is no limit to the number of Demat accounts you can open. You can open multiple Demat account in same name and with same or different DPs. But you should not apply for any IPOs for more than one time.

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I am a Software Engineer based in Chennai, India. My hobbies are blogging, driving. You can contact me here,

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Disclaimer: All the information given in this blog is only my ideas and knowledge what I got from internet or other sources. For any interest rate, charges etc check the particular service as the charge might have changed. Regarding the intraday trading tips, this is applicable for that day only and also shouldn't be taken as advice. All the actions taken by you is responsible by you only. Thanks.

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