Things you need before you invest in stock market

Let's examine what you require in order to invest in the stock market.


PAN card:You need to have a PAN card on hand before you can begin investing.

Demat Account: A dematerialized account, or "demat account," is one that holds all of your investments in digital form. Issuing physical shares has been obsolete since the development of Demat.

The creation of a Demat account is now an easy and quick process thanks to the current investing platform. Depository participants (DPs) and banks both provide consumers with Demat services, thus you can choose one of them to open a Demat account with. Before you can begin investing, you must pay certain charges and fees when opening a Demat.

Trading account: A trading account facilitates the purchase and sale of securities. If you are a trader, you might not require a Demat account if you do not receive shares via delivery; but, you will require a trading account to engage in trading operations. Choose a broker who is registered with both the BSE and NSE when opening a trading account.

Linking bank account: To buy and sell stocks, money must be moved. Every time you make a purchase, Demat is credited and your bank account is debited. When you are selling, the opposite takes place.

Investing in the stock market

There are two ways you can invest in the stock market – primary market and the secondary market.

Investing in the primary market involves investing in initial public offerings (IPO).

Investing in IPOs is a way to invest in a company’s future growth. Whether or not to invest in IPOs is a personal choice, but it gives a good opportunity to diversify portfolios.  You can choose to apply for an IPO through your bank or broker.

Companies issue IPOs when they list in the exchanges for the first time. IPO allotment happens through a lottery, depending on market response. It takes a week for an IPO to get listed in the bourses. Once the process gets completed, investors can start trading in the shares in the secondary market.

The secondary market is where buying and selling of stocks happens. The rules of demand and supply govern the secondary market, and negotiation happens buyers and sellers to conduct a trade. To participate in the secondary market, you will need a trading account linked to the Demat and bank account.


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