The stock market is a concept that is still not clear among individuals. In fact, there are several misconception about this field that have clouded people’s minds. But the real image is nothing like the imagined one. The steps to buy stocks online is easier than one can expect.
The stock market today stands as a market with an explicit financial objective of raising money for companies and regulate markets by allowing traders to promote capital formation. In order to start investing in it, individuals need to have an investment account for trading and storing securities (stocks). Now the question that arises is how to buy stocks online. Is it possible to buy them offline?
In this article, we shall learn how to buy stocks online from the stock market.
How to buy stocks online?
Few things are required in order to buy stocks online and start investing in the stock market.
1. Get a PAN Card
A PAN card is very important if an individual wants to buy stocks. According to the SEBI, a PAN card is mandatory to execute financial transactions. So, those who do not own a PAN card but are eager to buy stocks online must apply for one immediately.
2. Choose the desired broker
The next step to buy stocks online is to choose a broker. An investor cannot invest in stocks directly; it needs a broker who will forward the order to the exchange. All the stock brokers are registered with the Securities and Exchange Board of India (SEBI). The brokerage charged by the broking firm can be a percentage or a fixed value of the total turnover.
One can choose SMIFS as its broker and enjoy Free Call-N-Trade services. Also, investors can get daily stock recommendations and enhance the return from their portfolio.
3. Register for an account
In order to buy stocks online, opening a Demat Account and a Trading Account is mandatory. Securities (stocks) must be stored in a dematerialized form, hence the need for a demat account. A Demat account is required for storing the securities while a trading account is used for trading these securities.
It is mostly the broker who handles all the dealings, irrespective of whether it is a discount broker or a full-service broker. One can open a free demat account with SMIFS and be benefitted by the facilities of a full-service broker.
4. Link the bank account with the trading account
To buy stocks online, linking the demat account with the bank account is very necessary. For this reason, one must also have the bank account ready from where the fund transfer can take place.
When the investor buys a security, the payment is processed via the bank account. The amount will first have to be transferred to the trading account. Once done, the investor can execute the trade and amount shall be deducted from the trading account itself.
Once all the steps are complete, an investor can start trading via the trading account.
Strategies Involved For How To Invest In Stock Online
Many investors invest a good amount of their earnings in the stock market. But, a set of strategies must be followed as a means to overcome the risks of this volatile market. Here are some of the strategies that can be followed while buying stocks online.
1. Buy securities at a low price and sell them at a high price.
This is one of the basic tips that can be given to investors to make better gains. While the price of stocks starts falling in the market, an investor should buy the stock and sell it once the price increases through an online stock trading app. However, there is no guarantee that a stock that has fallen will increase.
2. Keep in mind the market fluctuations.
There is always a chance of the market becoming bullish or bearish. But investors must be ready to face those ups and downs and deal with their moves in a strategic manner.
3. Long-term returns are beneficial.
In order to buy stocks online, proper analysis is required. The quarterly or annual financial reports should be taken into consideration before investing. If chosen wisely, holding onto these stocks for a longer time can result in good profits. It is advised not to sell these immediately after a small increase in the price of the stock. By doing so, the purpose of long term investing may not be fulfilled.
4. Learn about the basics of investing in stocks.
There are many stocks that have offered good dividends in the past years. Coal India, for example, has a good track record of providing consistent dividends in the last 5 years. At the current stock price of ₹229.60 (as of August 29, 2022), the dividend yield is 7.4% (moneycontrol). The current stock price of ITC is ₹311.45 (as of August 29, 2022) and has provided a dividend of 3.69% (moneycontrol).
5. Restrain your tendency to make more money.
This is a common mistake made by several intra-day traders. Even though the situation in the market does not favour the trader, they still try to trade with their money that gets wiped out in one shot. Such desires should not drive an individual. Keeping emotions under control and making rational decisions should be an trader’s prime objective.
To learn about how to open a free demat account with SMIFS, check out our blog on how to open a share market account. For further queries, call us on 9830121215 or email us at email@example.com. Download SMIFS Elite- buying stocks online app and enjoy limitless trading.