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Share trading refers to the buying and selling of the shares of companies that are listed on the stock exchange for profit-making. National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) are the two major stock exchanges in India that facilitate online trading. Online share trading is the method of transacting financial products online using the platforms provided by brokers. It can be used to transact in all kinds of financial instruments like stocks, bonds, ETFs, futures options, etc.
Traditionally, when an investor wanted to buy shares, they used to call their broker and asked for placing a buy order for a specific number of shares of a company. The broker would convey the current market price and help place the order. Now, this process is simplified, and the control is in the hand of the investor where they can check prices and place orders on their own using the trading platform.
Once you buy a share of a company, you start owning some stake in the company. For instance, if a company has issued 2000 shares of which an investor owns 200 shares, that means he holds a 20% stake in the organization. This results in shareholders getting a say in the company’s governance and is eligible to vote on major decision-making policies of the company.
Even though this maybe beneficial for those who control a major portion of the company’s shares, from a retail investor point of view, they’ll only gain once there is a price appreciation in the share markets. Hence, investors try to make profits from share trading through the process of selling shares at a price higher than the buying price
To start trading online, you need two accounts — a Demat account and a Trading account. Stock exchanges do not allow direct trading; all transactions must be routed through a SEBI-registered stockbroker.
Demat Account: Used to store shares electronically. These accounts are maintained through two depositories — National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL).
Trading Account: Used to place buy and sell orders of shares in the stock market. It also provides access to live market prices and order execution.
To open an account, follow these steps:
Once verified, your Demat and Trading accounts will be activated for seamless investing and trading.
When a user places the buy order for any share, the order gets forwarded to the Exchange. If the price matches with another user’s order who placed a sell request, the order gets executed. The order is settled by the Clearing Corporation. It takes T+2 days for settlement where T is the day of trade. Post-settlement share is credited in the Demat account of the buyer.
After the company goes public and the share of a company starts trading on the Stock Exchange, the share prices are determined by its demand and supply.
If the demand for shares is high due to any favorable factor, then the price will increase. Whereas, if the company’s future growth potential doesn’t look attractive, many investors holding the share might start selling it leading to fall in price.
There are basically two types of players in the share market- “Traders” and “Investors”.
Both are often considered similar since both participate in the share market to earn profit. However, there are a few key differences between the two.
Both use different approaches to make a profit in the share market. Let’s look at the two separately to understand how different Trading and Investing is:
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The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) are the two primary stock exchanges in India. The share market trading time for the equity market in both exchanges is between 9:15 AM to 3:30 PM (Monday to Friday).
Online trading is trading through the digital platform using the internet.
Do you have a trading account app or demat account app?
You can open an account with Bajaj Broking in minutes.
Download the Bajaj Broking app now from Play Store or App Store.
Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.
This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.
For All Disclaimers Click Here: https://www.bajajbroking.in/disclaimer
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Investments in the securities market are subject to market risk, read all related documents carefully before investing. This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.
For more disclaimer, check here : https://www.bajajbroking.in/disclaimer
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