How to open a demat account and trade in Stock Markets in India?
Many people wants to trade in stock markets and are always searching how to do it.
I am sharing the information regarding How to open and demat account and participate in share trading or investment in Stock Markets.
Who can do the trading in Stock Markets or Invest in the Stock Markets?
Any person with eligibility to make contracts can participate in active trading or invest in stock markets. The person should be above 18 years to participate in stock markets. In India anyone below 18 years can not enter into an agreement.
Any educational qualification to participate in Trading or investing in Stock Markets?
No minimum qualification is required for participation in trading or investing in stock markets. However, if you having good knowledge of reading the financial statements, analysing the trends is good for making profits.
How do i start trading/investing in Stock Markets? What all procedure i have to follow?
First you have to open a Demat account. Demat account can be opened with any broker or through sub-brokers.
Once demat account is opened you excute the trades either yourself through software provided by broker or you can call and ask your broker to excute the transaction on your behalf.
What are the documents required to open a Demat Account?
To open a Demat account you have to provide the documents which fulfill the requirements of KYC (Know your cutomer) norms.
You have to sign a contract with Stock broker.
Generally the documents are:
- PAN (Compulsory)
- Bank statement
- One cancelled check
- Address Proof
- Income Tax Return
Once Demat account is opened, can i trade in BSE and NSE or both?
If your broker is registered with both exchanges, you can trade or invest in shares listed on any exchange.
My Shares are safe in Demat Account? What if my broker sale my shares?
Demate accounts are managed by NSDL (National Securities Depository Limited), NSDL maintains the database of Shares held. Once your share is transfered to Demat acocunt, you become the shareholder in company and your name is entered in share holders register of company.
Your shares are safe in Demat account.
If broker sell your shares without informing you, you can always take a legal action against him.
Brokers are not allowed to sell the shares without taking the permission from share holders.
Yes it is possible to open demat account even if you dont have the IT returns. Submit the latest bank statement to broker and he will open the account.
You should contact a broker to open Dmat account. You can contact broker whichever is near to you.
Please check these things before applying to any broker:
Software and Trade Margins
Opening a demat account these days has become really quick. I opened my demat account last week and it took Angel broking just one hour post collection of my documents to open the demat account and allow me online trading.
Here are some cues on the basics of demat account and stock trading that I have been using:
Highly recommended. Check for yourself: