November 15, 2020

How to invest in the share market? | Setup | Buy and sell

How to invest in the share market?

(Invest in share market) As an early investor, the process of investing and trading in the Indian stock market can be a bit complicated. This requires you to open some accounts and complete some formalities. If you are looking to invest in the stock market, then you do not need to look any further but by reading the following process you can start stock trading in no time.

Get pan card

Most everyone keeps a PAN card despite being an investor. But there is a possibility that there is some mistake in your PAN card regarding your name or otherwise. Permanent account number written on PAN card is a mandatory requirement to execute any financial transaction in our country. So the primary thing you will need to buy shares online is an error-free PAN card.

Hire a stockbroker

The stock market is not a place where you can go straight and buy shares with cash. Some specific people are authorized by the stock exchange to execute the purchase and sale of shares. These are called stockbrokers or just brokers. You need to appoint a broker to buy online shares and complete every other formality required to enter the Indian stock market. Keep in mind that you should only hire a brokerage firm that charges a flat brokerage fee instead of a commission on your transaction as it will be less expensive in many ways.

Open a demat and a trading account

invest in share market

Once you have hired a stockbroker, the next thing you need to do is to open a demat and a trading account. Since shares are no longer given in physical form, the demat account will hold your shares digitally and dematerialized. Whenever you buy or sell shares in the stock market, the number of shares will be credited and debited to your demat account respectively.

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A trading account facilitates the buying and selling of shares. This creates a link between your demat account and your bank. It is like a savings account that you open in a bank. It takes shares in your demat account and sells them on the stock exchange. Usually, this process is executed by your stockbroker after opening your demat and trading account.

Bank account

You must have a bank account linked to your demat and trading account. When you buy shares, the amount of money is debited from your bank account, and the shares are credited to your demat account. When you sell shares, your bank account is credited with the amount of money, and your demat account is debited with the number of shares.

To be able to get shares in your demat account (when you buy shares) and money in your bank account (when you sell shares), you must have a bank account, and this along with your demat and trading account The transaction must be connected smoothly.

UIN (Unique Identification Number)

If you will need a UIN number for trading in the stock market, then you need to see this. A UIN number is required only when you plan to engage in a single transaction of 100,000 or more. If you do not have a UIN; You will not be able to do transactions that are equal to or more than Rs 1 lakh.

Buy and sell shares

After all the formalities are completed, you can start trading in the Indian stock market and buy or sell shares. For this, you will have to tell your stockbroker the name of the company, the entry price and the total number of shares you can buy. For example, if you want to buy 1000 shares of XYZ company for Rs 500, which is currently trading at Rs 550, you can ask your stockbroker to buy 1000 shares as soon as the price falls below 500. is.

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For example, if you want to sell your 1000 shares of the same company in the future for Rs 700, which are currently trading at 600. In this case also, you can ask the shareholder to sell the shares after reaching the value of Rs. 700.
If the buy or sell order reaches its expiration date, your stockbroker will tell you about the same and the order will be canceled. Once withdrawn, you can order the same again.

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