A trading account is an investment account that investors use along with a Demat account to buy/sell stocks, bonds, mutual funds, etc. Instead of just cash, a trading account holds securities or other holdings administered by a stockbroker. Trading accounts are distinguished from other investment accounts by the level of activity, its purpose, and the risk it entails. Importance of Trading Account
Simply put, to trade on stock markets, you need to have an interface that provides you access to live market data and the ability to place your orders. This is where trading accounts come in: they act as an enabler for investors to buy/sell stocks and withdraw cash. Trading accounts come with varied types, sizes, and associated benefits. Now, once a trading account is in place, investors open Demat account to store the assets digitally made during online trading.
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Importance of Trading Account
As you already know, a trading account is critical for actively trading on the stock market. Here are some apparent benefits:
Access
Whether you are looking to trade markets actively or invest in initial public offerings, a trading account suits your requirement. Here you can trade directly and keep an eye on your open market exposure (holdings/Investments). In addition, live market data of different exchanges, trading tools, and quick actionability is what you get with a trading account.
Financial reports
With a trading account, you get the ability to trade yourself and get insights and reports about various market events and stock-specific research. These reports enable you as an investor to make informed decisions. There can be several factors that investors can miss, but when your decision is backed with experts’ insights and opinions, you are likely to come across most of the factors to make an informed decision.
Digital solutions
Trading accounts are evolving with the latest technologies. Most service providers will provide you with an app-based service to efficiently access the markets and trade. These apps can be accessed through your smartphone. Besides market access, these services often include chat-based customer service to make the experience even more fulfilling.
Personalisation
When these accounts, you get the ability to personalise your trading experience with ease. So, for example, the customisation of screeners, order modification, and all that available in the desktop version of the trading account is also available in the handheld version.
How to Open a Trading Account?
You can open a trading account nowadays with a few clicks on your mobile/computer:
Step 1 – Browse the website of the Service provider of your choice.
Step 2 – Scroll to the link for opening a trading account/ New User Setup.
Step 3 – Fill in the required details
Step 4 – Verify the same with codes sent to Email/Mobile
Step 5 – You will get the documentation procedure.
Step 6 – Once Documentation is completed, your account will get activated depending on the service provider.
Step 7 – Link your trading account and Demat account, and you are all set to trade.
With the increasing trend of online stock market investment and the general population becoming more aware of the stock market, the apprehension of direct stock investment is reducing.
This is giving people an opportunity to start building investment in stock markets. By opening a Demat account and trading account, you can begin gathering knowledge and investing based on your understanding.
