A Trading and Demat account is required to trade in the Stock Markets. It is much easier to open a Stock or Stock market trading account these days than it was before 2011. Before 2011, you had to sign a million times and fill out a 60-pager form with your name, email address, and signature. It seemed like an endless process. After that, it would take more than a week to open the trading and Demat account. The Login ID and password were sent via courier.
Technology has made it much simpler and quicker to open a share or stock market trading account.
How do you choose a stock broker?
Select a Stock Broker from the 1000+ options. These are the most important factors to consider when choosing a Stockbroker. There are two main categories of stock brokers: Discount Stockbrokers and Online Stock Brokers. Traditional Brokers can also be considered Full-Service Brokers.
- Brokerage Fees
- Trading platforms
- Other Miscellaneous Trading Charges
Brokerage is the most significant of all the evaluation parameters. It is the first step to selecting a stock broker. Brokerage refers to the Fee your Stockbroker charges you for each transaction. The brokerage fees are typically a percentage of the transaction size. For example, 0.05% for Intraday trades and 0.50% for delivery trades. Rs 50 per lot for derivatives (future or options) This Brokerage Calculator will calculate your brokerage using a traditional percentage broker or one of India’s top discount brokers.
It is expensive to charge customers on a percentage basis. This can cost you up to 10% of your capital. Warren Buffet’s principle states that transaction costs should be kept low. However, technological advances have given investors more options. Discount brokers are new-generation brokers that charge a flat fee for brokerage.
This is a boon for both traders and investors. SAMCO Securities, one of India’s most trusted discount brokers, charges 0.02% (or Rs 20) as brokerage fees. This fee is independent of transaction costs. A Stock Broker that charges low brokerage fees is a good choice. Create a Trading Account at SAMCO Securities.
Forex Platforms allow you to place orders in Stock exchanges. They are generally available for WEB and Desktop, as well as Mobile apps. It is important to review the trading platforms offered by each broker.
These platforms can be used to trade. The trading software is reliable. You can withdraw money from your bank account and receive payouts. You can also buy and sell shares. You can see your shareholdings as well as your trading RMS limits.
Margin and Trading Limits
Your broker may extend trading limits to you based on the amount of cash/stock assets in your trading account and your Demat account linked to your stockbroker. Brokers may extend these limits for delivery trading or intraday trade purposes. It makes sense for clients to choose brokers that offer maximum value against cash/securities. You should also ensure that broker policies are flexible, accommodating, and not restrictive. Otherwise, they could hinder your trading. SAMCO’s Margin Calculator can help you calculate the margin requirements of different trading instruments.
Transaction Related Miscellaneous Charges
Before opening a Trading or Demat account, it is important to consider any additional charges. Other charges include account opening fees, Demat AMC charges, and charges for SMS updates. Ask your broker for a list of additional charges and ensure that it is included in your tariff. A list of charges for commodity and stock trading can be found at SAMCO’s Charge List
There may be additional items on the client’s checklist, but this is the minimum that a client should use.