Home Tech Why is a Trading Account important and how to open one
Why is a Trading Account important and how to open one

Why is a Trading Account important and how to open one

by Rohan Mathew

Introduction

Stock markets have never failed to appeal to Indian investors. Every movement in the stock markets throws a bunch of profit-making opportunities. And the technological advancements in these markets have evolved the systems and processes, making them even more attractive now. Accessing the markets is effectively at its most accessible and cheapest now. You don’t require brokers or any other middlemen to punch in your orders. You can do it yourself. Just get yourself a Trading Account, and then you’re good to go!

What is a Trading Account?

A Trading Account is an account through which you can buy and sell shares and other securities. It is an evolved platform and has replaced the ‘Open Outcry System’used to trade in stock markets earlier. In the olden times, traders would verbally communicate or signal with hands to trade. But, that system is not prevalent anymore due to the adoption of new-age technologies.TheTrading Account has digitalized the process of trading in stock markets. 

How does a Trading Account work?

Every Trading Account is assigned a unique identification code that maps the account to you and accurately facilitates your trade. Your Trading Account is linked to your Demat and Bank Account. If you want to buy a share, you will punch the purchase requirement in your Trading Account. Consequently, the money to buy that share will get debited from your Bank Account, and the purchased share will get credited to your Demat Account. Similar is the case when you want to sell shares and securities. The only difference being the shares get debited from the Demat Account, and money gets credited to the Bank Account.

Features of a Trading Account

Less Time

In stock markets, every fraction of a second can make a difference.Hence, it is wise to use an efficient tool that can capitalize every moment. A Trading Accountdoes precisely that by quickly completing your purchase and sale transactions so that you can immediately move onto other transactions and opportunities. A couple of clicks on your screen is all that is needed to process your trade. And funds and security transfers can be done within no time, especially when your Banking partner is the same as your Demat and Trading partner. Hence, if possible,it is advisable to open all three accounts with the same entity.

Complete Accessibility

The electronic format of the Trading Account is a boon for us as it gives us the leeway to access it whenever we want from wherever we want. You don’t have to be present at stocks markets to trade anymore. A Trading Account eliminates the dependency on brokers to execute your trade. You can do it from your comfort zone at home, your office, or anywhere – all you need is a smartphone or a tablet, a laptop, or a desktop powered with an internet connection. 

Improved Monitoring and Control

A Trading Account is a one-stop shop that showcases your entire portfolio’s trading details in an organized fashion. This convenient user interface helps you check how your shares and other securities are performing.Accordingly,you can manage your money better and make wiser investment decisions. And this ability of monitoring and control is integral in achieving your financial goals.

Minimal Cost

The cost component associated with a Trading Account is minimal because of the reduced time and effort used due to an online Trading Account. The commission and fees that you would have otherwise paid to a broker are also eliminated. Moreover, online Trading Accounts offer great rates to process bulk transactions too.

Access to Research

As a Trading Account holder, you have access to valuable expert-driven research that consists of reports, trends, recommendations, etc. This information is usually posted on brokerage companies’ websites and helps you grow your wealth better. Regular browsing through this data will help you to invest better.

How to Open a Trading Account?

You can open a Trading Account easily using the online or offline platform. The broad steps to open your Trading Account are listed below,

Pick the best Registered Broker

AS per SEBI, you can open your Trading Account only with a registered broker or brokerage company. Hence, first, conduct preliminary research online and find out who is the best broker in terms of service, affordability, and reputation. They excel in all the broker selection criteria. 

Submit your Account Opening Application

You have to fill up a Trading Account opening form and submit it. You can do this online on your broker’s website or offline at the nearest branch of your broker. Alongside submit the mandatory KYC documentation that includes PAN Card, Address Proof, Income Proof, Bank Proof, and other miscellaneous documents. For a smooth account opening process, always keep your documentation handy well before time.

Complete Verification Process

After yousubmitthe application form, you will need to undergo a verification process by the broker. Depending on your preference, you can go for in-person or over-the-phoneverification.

Procure Trading Account Details

Successful verification means you will receive the Trading Account details. You can login to the broker portal or mobile phone app using these details and start your journey in trading.

Conclusion

Getting a Trading Account is only the first step into the world of financial markets. There is still a long way if you want to multiply your money and create wealth here. Hence, take your first step at the earliest so that you can achieve your financial goals quickly.

Disclaimer – ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. – ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai – 400 025, India, Tel No : 022 – 6807 7100. The contents herein above shall not be considered as an invitation or persuasion to trade or invest.  I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.

Related Articles

Leave a Comment