The stock market is a platform where buyers and sellers meet for the exchange of securities and other financial instruments. For investing in shares following are the easy steps to be followed:
1. Register to issue a PAN card
PAN(Permanent Account Number) is a unique ten-digit alphanumeric code issued by Income Tax Department to every tax payer. To begin with, share trading having a pan card is mandatory. It serves the purpose of identity proof as well.In our country to enter into any financial transaction having a PAN card is the must.
2. Choose an optimum broker
For buying or selling shares we can not directly go to exchange. A representative registered and licensed by SEBI(Security Exchange Board Of India) enable us to do us. They are called brokers. Brokers can be individual or even online agencies. Traders can save huge cost by choosing Discount Brokers for brokerage services. This amount saved can be used for making further investment in stock market and earn more profit.
3. Open Demat account & Trading account
Demat account is the account in which all the shares you buy are electronically placed and removed when you sell it. No physical existence of shares are there only in electronic format they are stored in Demat account.Trading account is the account where capital required for trading is kept.All your transactions of buying and selling will be reflected in these two accounts.
4. Get UIN number if planning for big investment
Traders willing to make big investment require Unique Identification Number. Small traders do no require this. This is not a mandatory requirement.
Now how shares are actually traded on the exchange ?
For buying and selling of shares, you need to inform your broker. For an instance, you want to buy 50 shares of Mahindra & Mahindra Finance at its current market price. Then you have to give these details that at what price and quantity you want to buy this share. Similar will be the case if you want to sell a particular share.Once you place your order you broker will keep you updated with it.
Once the above-discussed requirements are completed you can easily begin with share trading. Making profit here is not a big deal. A wise trading strategy is all required to succeed.