How to trade in Demat Account?

Demat, short for dematerialized, is an account used to hold securities electronically. Trading in the stock market can be a profitable venture, but it can also be overwhelming for beginners. That’s when Demat comes into the big picture. Wondering how to trade in Demat Account? Here’s a guide!

Opening a Demat Account:

The first step in trading with a Demat account is to open one. This can be done by contacting a Depository Participant (DP) or a broker. The DP will provide a Demat account opening form that needs to be filled in and submitted along with KYC documents.

Linking a Trading Account:

Once the Demat account is opened, link it to a trading account. The trading account is used to place buy or sell orders for securities. You can do this by providing the DP with the trading account details, or some brokers offer an integrated Demat and trading account.

Placing Orders:

After the Demat and trading accounts are set up, the next step is to place an order for buying or selling securities. You can do it through various means, including online trading platforms.

Types of Orders:

Two types of orders are typically placed: market orders and limit orders.

  1. Market Orders: Market orders are orders to buy or sell securities at the current market price. Market orders are executed immediately.
  2. Limit Orders: Limit orders are orders to buy or sell securities at a specified price. They run only when the market price reaches the specified price.

Monitoring the Portfolio:

Once the order is placed, monitor the portfolio regularly. You can do it through the online trading platform or mobile app. The portfolio will show the securities held in the Demat account and their current market value.

However, understand that trading in a Demat account requires a basic understanding of the stock market and the trading process. If you still find how to trade in Demat Account confusing, you can always contact the professionals to help you navigate the turbulent seas of the share market. Besides, research vividly, and analyze portfolios thoroughly before and after placing an order.

Related Article: How to open a demat account for the share market?