Trading online for shares and mutual funds do require certain considerations. Investors looking for having online trading of funds are required to have themselves registered with the stock-exchange. For getting this done, the traders can open an account with Brokers or Financial institutions who trade on their behalf in the stock market. The real time stock trading platform is power packed with useful features like advanced portfolio tracker, live market watch, stock screener, technical analysis of stocks and many more. Opening an online trading account with the best online trading account in India can allow one to enjoy these exclusive features for free!
Steps to create an online trading account- The first step to successfully start with the stint of trading begin with opening an online trading account. This step is though very challenging so one has to be very conscious and careful while doing so. There are few things or points that needs to be clarified before opening the account like-
- Know clearly about the brokerage sign up process- Every broker has different terms and conditions for opening the account. For e.g. some brokers do take funds from the investors bank account whereas others might take cheque from your friend in order to fund your account and so on.
- Get to know about the type of account to be opened-The type of account the investor choose will directly depend on whether the account is taxable or tax deferred which would be something like a 401(k), IRA, Traditional, Roth or SEP. Secondly, whether the account is in the name of single owner or joint account in case of sharing it with the spouse.
- Know about the settlement period-Talking about the transaction plus two i.e. T-2 or plus three means- the settlement. For example- If I buy a stock on Monday and the transaction was at T-3, which means the whole thing is settled and done on Thursday and I would have the availability of any remaining cash available to me for further purchases. Depending on the amount of brokerage many of the brokers will offer T-1 as their settlement period.
- Know about the margin- As an investor there are additional stock credit that is given which is called the margin. This is the margin offered by the brokers for the trading account. But, when you credit is borrowed, there is always going to be interest that is to be paid. Interest is paid only if you hold a position overnight. The interest rate directly varies upon the brokerages and varies slightly from broker to broker.
- Brokerage firm rules- The brokerage firms have certain policies where the privacy of investor and how their information is handled. One must as an investor makes sure that time is taken to familiarize yourself with the brokerage firm’s rules for the handling of your personal information.
There are many benefits also which are entertained by opening an online trading account. Some of the brokers do charge zero charges for the opening fees and good analytical tools with convenient trading options.