We live in an age powered by technology and there is scarcely a product or service that cannot be purchased online; processes are no different. With the application of technology, several processes across sectors have been streamlined, and securities trading is one of those. 

Online trading has made the Indian securities market more accessible, particularly for beginners. In order to carry out online trading in the securities market, you are required to have a trading account. 

What Is A Trading Account 

A trading account is an account that is used to place orders for market-linked securities with stock exchanges. You can open a trading account with any authorised stock broker in India. 

It is important to select a trading account offering that contains all the required features as per your investment goals. In addition to a trading account, you also require a demat account; this account is where your market-linked securities shall be stored in a dematerialised state. 

What Is Online Trading 

Online trading is the purchase and sale of securities through an online platform. Registered stock brokers offer user friendly trading platforms where you can check the latest market prices of assets and directly place orders with stock exchanges. 

In order to access such a platform, you must have a trading account with a registered stock broker. We have already discussed what is a trading account and how it works. 

There are several benefits of online trading, including cost savings, no need for any intermediary to place your orders in the securities market, flexibility to trade from your home/ office etc. 

How To Do Online Trading In The Securities Market 

Online trading may seem daunting for new entrants in the securities market, but the process is highly transparent and user friendly. Let us discuss how to do online trading in a step by step manner. 

1. Define Your Investment Goals

To begin with, you must determine what you aim to achieve from your investment in the securities market. 

Furthermore, you must ascertain your risk tolerance, the types of assets and sectors you wish to invest in, the period you wish to invest for (long term or short term), etc. Having clarity on your investment goals can help you pick the right trading account and demat account, and, in turn, suitable securities for your portfolio. 

2. Open A Trading Account And Demat Account

As the next step, you must choose a stock broker registered with the Securities and Exchange Board of India to open trading account with. 

While selecting a trading account (or a combined trading and demat account), you must assess the features of the account and the trading platform. 

Depending on your investment requirements and budgetary constraints, you can pick a Full Service Brokerage Account or a Discount Brokerage Account. You can complete the process of account opening online. 

3. Select Assets To Invest In

The next step in online trading is selecting the assets to invest in. You can choose from a wide array of securities across sectors ranging from Information Technology to Retail. Amongst the assets you can opt for are shares, bonds, mutual funds, and derivatives. 

4. Add Funds To Your Trading Account And Purchase The Selected Securities

Once you have selected the securities you wish to purchase, you must add the required funds to your trading account, and place the buy order/s. Then the same process must be repeated for every new order (or you can keep surplus funds in your trading account). 

The Bottomline 

We hope this guide on how to do online trading is helpful to you and has answered important questions such as what is trading account. Before you start trading in the securities market, you must understand the process of online trading and choose a suitable trading account platform.