Demat account is very similar to a bank account. It is just like the entry that you make on your passbook for bank balance which is not held physically. The same way securities are stored in a dematerialised or an electronic form and credited or debited.
In accordance with the Securities and Exchange Board of India, you cannot buy or sell shares physically at any of the exchanges. The share certificates that were used previously are no more valid and not permissible for trading. Therefore, demat shares can only be bought or sold through the Bombay Stock Exchange or the National Stock Exchange.
So how does a Demat account work? If you have bought some shares, the broker will credit your demat account with those shares which will then reflect in your statement. However, if you have an online trading account, you can readily view your shares online. Usually, the broker follows T+2. i.e. trading day and 2 days post that to credit the shares.
If you sell your shares physically, you will be required to give an instruction note to your broker and then fill in the details of the various stocks. Your account will then be debited with the shares after which you will be paid the amount for the respective shares sold. However, if you have done it online, there will be automatic debit of shares. Even the amount will be automatically credited to your account.
Therefore, opening demat account online is far more convenient than dealing in physical shares. Besides, more and more traders are becoming aware of its merits. It is an absolutely hassle-free process where you do not have to be dependent on a third person for your day to day trading activities. Irrespective of where you are, you can keep a track of your shares online. All you need is a laptop, a good internet connection, and of course, electricity!
watch this video on How to open an Demat Account
Stock trading can be financially rewarding if done in the right way. If you are new to the stock market, trading stocks can seem like a daunting task. Investing in the stock market involves riding the various ups and downs of the market. However, stock market investments are a great choice when it comes to long term wealth creation. It might take a while for you to hone your skills, in order to make substantial profits. The key to trade successfully is patience and steady behaviour.
Most of the stocks are traded at stock exchanges, which are places where buyers and sellers meet and decide on a price .The purpose of a stock market is to facilitate the exchange of securities between buyers and sellers to reduce the risks of investing. To ease you anxieties about investing in the markets, here are a few tips:-
- Follow the market: – Keeping tabs on the latest stock market news is essential for successful stock trading. By monitoring the markets updates each day, you can gain an insight into the latest current business trends and economic concepts. The stock market websites and business news channels are an excellent way to keep an eye on share market update today.
- Timing: – Stock trading is a skill. Look for the most volatile market timings. Generally 9.30-11.30 am is a good time to trade in Indian stock markets as most of the market activities take place at these hours.
- Gain more knowledge: – Books provide a wealth of information and cost much less when compared to the costs of classes, seminars, and educational DVDs. Reading articles on investment strategies will also prove extremely beneficial. Aside from these, you can also follow tips from investment websites online.
- Attend seminars: – Seminars on investment can often be an enlightening experience for new investors. Seminars usually focus on specific aspects of the share market and the strategies used by the speaker over the years to gain success. Most of the seminars are provided free of cost, so make sure you don’t miss out one of these.