Based on the availability of capital and investment, a company’s capital, or stocks (common name) are divided into small units for selling. These units are called Shares. Purchasing a share means holding a percentage of ownership in a company. If someone wants to multiply their money using markets, then investing in shares is a useful option.
Following are the ways through which online trading is possible:
- Getting a PAN card- before making any financial transactions in India you need a PAN card, as per the regulations of the government. Thus, PAN is a useful entity for both bank-related and market-related transactions. Here, we are talking about market-related transactions, which are buying and selling of stocks.
- Opening a DEMAT account- a Dematerialized Account is used by those people who invest money in some stocks and hold them for a long period of time. In a DEMAT account, the physical shares are converted in electronic format and kept in the account. It is quite similar to the bank account where money is deposited and withdrawn.
- Opening a trading account- once you have a DEMAT account, having a trading account will help in buying & selling shares online. Just as a DEMAT account is used for holding shares, the trading account is used for making sales.
- Registering with a trading platform/brokerage firm- for purchasing and selling activities, direct trading is not possible. Therefore, a unique platform is required for doing so. This platform acts as an intermediary between the stock market & you. It is also known by the name of ‘online broker’. Various firms provide online brokerage services in the stock exchange, in India. Examples are- Zerodha, UpStox Pro, Angel Broking, etc. You can register with them and create your DEMAT and trading accounts for free.
- Linking of Bank Account with the brokerage firm- this process is entirely safe & simple as all the brokers in India are certified by SEBI.
- Getting UIN (Unique Identification Number)- SEBI has made it mandatory for all the investors and market participants in India to get a UIN for purchases over Rs.1 lakh, failing which you won’t be able to trade in such a lump sum amount. Don’t worry, the process is very simple. Your UIN is automatically generated after linking your bank account with the trading account.