Demat account:

Just like in a bank, you must have a bank account to deposit your funds, a demat account offers you a similar service in the stock market. It acts as a computerized storehouse for financial securities like direct market instruments, derivatives, and mutual funds. Due to the Dematerialization system, financial securities keep with depositories through this demat account. It occupies various features that you can understand with given points:

Features of Demat Account

• Demat account is a secure and online safe house for financial securities traded in the stock market.
• It deals with different types of securities like mutual funds, ETFs, derivatives IPO  securities, and direct stocks.
• It holds the securities with two major depositories namely NSDL Ltd. and CDSL Ltd.
• With an online system, it transfers the ownership of securities among participants/traders swiftly.
• Unlike paper-based record maintenance, it protects investors from physical issues. These are theft, physical destruction, and other major issues.
• Demat service allows the trading account facility along with withholding. With a trading account facility, investors can buy and sell shares and other securities without any hurdle.

Understanding basic demat features assist you in dealing with the stock market. To start your auspicious trading venture in the stock market, you need to start by opening a demat account. 

How can you open a demat account?

Opening a demat account in the present world is quite simple. All you need to visit any stockbroker that will provide you a complete demat service. Following steps of demat account opening procedure will guide in real trading.

Step 1:

Prior to any trading decision, you should analyze your financial goal. Analysis of proper financial goals gives you an insight of your preferences and interests.

Step 2:

In this step, you will have to browse multiple stock broker websites available on the internet. You can find hundreds of firms offering a free demat account that confuses you a lot. To select the best stock broker for demat account opening procedure, you need to compare these brokers on certain parameters:

• Free account opening or charges a minimum fee.
• Per transaction cost.
• Annual maintenance fees (Sime stock brokers offer free service for first-year while some offer service with fees).
• Account activation period.
• Essential documents requirements.
• Minimum time required to open an account.
• Additional analysis and support services.

By comparing the Demat account brokers, you can easily opt the best service provider without confusion. You should select a broker that allows you a free or minimum cost service with less account activation period. and more additional service, most relevant document requirements, and least per-transaction fees.

Step 3:

With a selection of the best match for your preferences, you can start an account opening process with their online trader app Every stockbroker has its online applications available on the google play store that you can use to proceed. To open an account, you are instructed to fill an online application form that asks. you to fill in your personal details, email account address, password, residential address, account details, and other important information.

Step 4:

After completing an application form, it demands your photograph either register with an Aadhar card or an original real-time photo. By completing this process, you will require to upload various relevant documents, which are as follows:

• ID proof: Voter card, Aadhaar card, Passport, PAN card.
• Bank proof: Bank account details, 6-months bank statements
• Income proof: ITR receipts, annual income or salary receipt, bank statements.
• Valid passport size or real-time photo.

These documents must be upload with due diligence as they can affect your account opening norms.

Step 5:

Brokers’ KYC team verifies all the details and documents that are uploaded by you for an account. With successful verification. you get a notification of approval of account activation in the application. This activation process generally takes around 24 hours. 

Step 6:

Proper account activation of account gives a unique client number and ID with the concerned broker and depository. This unique investor ID allows you to start your trading in the stock market without any trouble.

Definition of Intraday Trading

As the name suggests, Intraday trading means “within the day”. Buying and selling of shares on the same day. within working hours of the stock market, is known as Intraday trading. The main objective to do an Intraday trade is to make small profits through price fluctuations in the market and control the stock index’s movements.

A thumb rule to do Intraday trade is to specify the orders for Intraday trade otherwise the broker can convert the trade to delivery and square off the trader’s position. Let us understand the concept of Intraday trading with the help of a very simple example. A person X purchases 1,000 shares of a company at Rs. 500/. The first thing that he needs to do here is to mention “Intraday.” As an indication to the broker that X will trade these stocks before the market closes on the very same day. Within an hour’s time the price of this particular share that X bought, rises to 560/. If the trader wishes to trade at this price then within an hour’s or two time, X has been able to make a profit of Rs. 60,000/-

Benefits of Day Trading

• Lower brokerage: The commission or the brokerage charge for day trading is less than those of delivery/regular trading. The demat trading meaning should be synonymous with low brokerage.
• Less risk: Since the shares are bought and sold on the same day, there are no overnight risks. as in case of regular demat trading meaning where the capital is locked in for a stipulated time period.
• Higher returns: Huge profits through BitQT app can be made if investment strategies of Intraday trading are applied correctly.  In an upward market, capital growth of a rising share can be achieved easily. while intraday traders can short sell to earn profits in adverse market conditions.
• Profit generation through short selling: In case it is expected that the price of a particular stock will go down further, a trader can short sell by BitQT app (sell before even buying) the stock and gain.

Also read:- How Does the Stock Market Affect the Economy?