With computers and digitization, the age of online trading is also here. Websites and apps now help you buy and sell stocks at the click of a mouse.
Here is a guide for to join the online trading bandwagon.
What would you need to get started?
1- PAN card
To trade in the Indian share markets, it is mandatory to have a Permanent Account Number, or PAN, which is a 12-digit alphanumeric code provided by the Income Tax department. It is essential for executing any financial transactions in the country. PAN is also mandatory for opening a bank account, participating in mutual funds, filing income tax returns, etc.
2- Stock broker
These are individuals/companies/online agencies that are certified to act as the transaction mediators in the stock markets. An individual cannot directly sell and buy the stock of any company; he/she can only sell or buy stocks via a broker. Brokers are listed and licensed by SEBI, the markets watchdog of India.
3- Demat and trading account
Once you have found a broker, you would require a demat and a trading account. A demat account, similar to a bank account, is an account that will keep your stocks or shares in a dematerialized (electronic) format. A trading account, on the other hand, is the account which you will use to buy and sell stocks.
4- Depository Participant
There are two depositories in India: NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited). Their participants are called as depository participants and they offer you an account to hold your purchased stocks.
Once you have completed these procedures, your dreams of making profits from the stock markets would just be a click away.