Types of Trading Account in Stock Market

Types of Trading Account in Stock Market: There are two types of account used in the stock market to start investing. These two accounts are demat account and the trading account which is used for trading in the stock market and shows all the transactions of stocks.

• Demat Account: Demat is a type of Account used by the investors to hold their shares in an electronic form. The Demat account’s stocks are in dematerialized form. Dematerialization is the process of converting the physical shares into the electronic format.
• Trading Account: The trading account is used to manage the capital in account & its transactions. This account is used to manage the transaction of buying and selling of stocks. Through this account, the investors give the order to stockbroker to buy or sell shares. Trading account is linked with the demat account to hold the shares bought through the trading account. When we sell these shares the stockbroker deducts the shares from the demat account and the amount is credited to the trading account.

Stockbroker and Trading Account: A person cannot give direct orders to the stock market to buy or sell the stocks or shares. The stockbroker is the person who plays the role of mediator between the trader and share market. The stockbroker takes the order from the investor and executes it in the share market. The stockbroker opens the trading account for investors and provides the user login id and password of that account. Through this account, the trader can view all the transactions. Documents require: Pan card, Passport size photos, Address proof (Aadhar Card, Voter Id, Passport etc), Income proof. Benefits of Trading Account:

1. Easy to buy or sell the stocks.
2. Facility of debit and credit amount to trade stocks.
3. Facility of Margin Money
4. Digital work- No paperwork or order requires.
5. Online trading minimizes brokerage charge.
6. Easy to access the account from anywhere.