The stock brokerage firm that you choose to go ahead with
should ideally be explaining to you what each part of the account does and how
they are to be used in everyday trading situations. In India, in order to trade
in stock shares, you must have a savings bank account with any of the banks in
India and open a DEMAT account with them for online trading. Depending on the
bank, the minimum amount required to be maintained in the account at all times
varies as minimum balance and the commission charges of the bank depends on the
volume of trading transactions you carry out. So, for example, if you trade in
really amounts, the banks commission charges may be high enough (always
expressed as a percentage of the amount of transaction you make) to eat away
your profit. So, choose your onlinetrading brokerage firm or bank carefully and select an optimum amount to
trade in.
Online shares trading, usually,
require a platform where you can see the prices and movements of the companies
which have listed their shares for trade with the Bombay or National Stock Exchange.
If you wish to trade in shares of foreign or multinational companies, there are
firms that accommodate them too. So, familiarize yourself with the technical
aspects of the account, for example, how you make a purchase or sale, or how to
use the tool to keep shares on hold, or how do you use it to compare the
performance of one company’s shares against those of others in the same
industry. What you must also check is how safe will your transactions be on
this site. As the DEMAT account will have to be linked with your current and/or
savings account from which money is drawn or deposited into, chances are that
if that account is hacked, so can your other accounts be. They are all synced
together. So, pay special attention to the prompts about log-in details,
passwords, etc. that the tool offers your from time to time. Keep your details
on it updated always to ensure you can be easily contacted in times of
emergencies and, of course, be KYC compliant.
The brokerage commission charged by the firm may be broken
down into parts, based on the services you want to use. So say, a broker may
charge INR 700 to provide advice on share trading tips, INR 500 for options
trade, another INR 3100 for a mutual funds fee with no load but zero for those
with load, have a margin rate of say 7 to 8% of the profit you make and has a
minimum deposit of INR 10,000. So understand what each of these figures mean so
you can roughly estimate how much money you will be making as a net profit,
after all these charges have been cleared with the broker. And depending on
well maintained and fast the platform maintained by the broker is, these rates
keep varying.
So fees, tools, login details and messages provided by the
trading platform are a few basic things you need to learn about before you can
start trading online on a regular basis.
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