The Indian stock market has a long history of moving from an offline to online system. Prior to 1996, financial transactions on the stock exchanges were executed in physical form. Physical transactions faced a lot of issues such as delayed transfer of securities, theft, and wear and tear.
With technological advancement, stock market trading is now possible through a digital system that comprises demat account, digital fund transfer with fintech companies, and other financial services. Online trading in the financial market refers to the buying and selling of stocks, bonds, and other securities through digital accounts, namely demat and trading accounts. It facilitates settlement of transactions within 2 days of placing an order. To start your online trading, you need to open a demat account online with a broking firm.
Essential requirement for online trading in India:
To start online trading in the Indian stock market, various requirements need to be fulfilled. An essential requirement for online trading is to open a demat account online. You can open your account with any broker. In India, many financial institutions and banks offer low brokerage digital demat account services with numerous facilities.
You can search for the best demat account provider with low demat account charges. Brokers impose multiple charges such initial expenses, annual fees, transaction costs, annual maintenance fees, and other charges. Prior to starting a trading venture, you should compare different brokers’ services along with their costs.
How to trade online with demat and trading accounts?
With growing awareness regarding stock market investment and trading, investors actively show their interest to trade in the market. A major question that arises before trading is about trade process and initiation. With the following steps, you can start your trading in the market:
- Open your demat cum trading account online with a suitable broker.
- To buy and trade a security, you need to have some funds in the account wallet. Add funds to your wallet with a simple click. Fund addition is available with different digital bank-linked payment portals.
- With successful addition of funds, you can buy stocks and other securities digitally. For this, select a stock or security that you want to buy.
- Place an order with a simple click on ‘buy stock’. The broker initiates your trading right from the moment you placed an order.
- In the stock market, you can make several types of orders like market order, limit order, stop order, and others. Before selecting an order option, proper understanding of all orders is mandatory to avoid uncertain consequences.
- Order day refers to a transaction day when your broker will debit funds from your account. After 2 days, brokers exchange funds and securities between seller and buyer.
With the above procedure, you can efficiently execute your online trading without much effort. Digital technology and advancement ensure smooth flow of funds and securities between traders in the market.
Future of online trading:
Financial market is enjoying new technological advancements every day. Trading online with the help of brokers, depositories, clearing houses, and other participants have made it easy for investors to buy and sell securities.
With the introduction of artificial intelligence and automation, online transactions can be done with algorithmic trading, and machine learning stock market prediction models. These advanced features are yet not developed, and in the developing stage. Brokers are working with these automated models to provide the best stock recommendations. These stock prediction models will help in the best buying and selling of stocks and other securities.