Stock Market - How to choose a Brokerage House to open an Online Trading Account

Online Trading – wisely open a Demat Account

Stock market Trading is quite easy nowadays compared to earlier times. Allotting time to go to the broker, handing over a cheque to him…in case of need, again going to him for getting cheque… for trading in shares, ring up and wait – these are the routine tasks for people dealing with share market these are the things of past. To avoid such teasing moments, there is a way out and it is Online Trading. More and more people are availing this online trading facility in Stock Market.

Before jumping to avail these facilities, you better take note of some important points. Select the broker tactfully for conducting the transactions if you want the innumerable benefits that are available for online trading customers. Enough one has a computer and a trading account; customer can directly do the transactions. It is simple to purchase shares online. No need to ring up to the broker to purchase shares. Absolutely no need to spend time, money and get strained to go to the Bank, to the broker, deposit the cheque and for similar operations. Related transaction activities need not be restricted to equities and derivatives; applying for mutual funds, IPOs, fixed deposits, postal and insurance schemes can also be covered.  Purchasing mutual funds, insurance policies, applying for IPOs, investing in fixed deposits can be done through online broker. Especially, young professionals are extensively utilising this mode of trading.

Open an online trading account according to your needs.

If you are new to the trading, be cautious not to give any guarantee in the transactions. If you choose the option of payment according to the transactions, you have to pay some percentage as brokerage. No need to pay anything if there are no transactions. If the broker requests you to take pre-paid offer, limit it to a small amount. Pre-paid offers start from Rs.1000.

Be alert in your dealings through online

It is a common practice with brokerage organisations to offer attractive rates to tempt investors.  Note that for every transaction you make, the total expenses would include along with brokerage, security transaction tax, turnover tax and other related charges. Whoever the broker may be, the charges related government will be uniform. Usually, brokers charge small amounts of brokerage, since the Depository Account will be with them only; however, if the Depository Account is with some other one or somewhere, then they charge higher brokerage. Get sufficiently acquainted with such small, but vital information while discussing with your stock broker.

Cash Transfer…

The most teasing point that investors generally face is Cash Transfer. Many brokers have tie ups with banks for online cash transfer facility. Be extra careful when there is two-way cash transfer i.e., from bank account to broking account and from broking account to bank account. Regular monitor your bank account and it’s transactions.

Multiple choices…

Stock Brokers facilitate for maintaining the account through various modes - telephone, online or through the departmental Relationship Manager. When there is no internet facility or you are on the move, telephone is the best choice.  Some of the Share Market brokers charge less for online transactions; if they are through Call Centre or through Relationship Manager, the charges will be higher. Get acquainted with the charges you have to pay for each mode.

Be careful…

You will be highly elated when you are viewing the demo relating to online dealings, but when you practically do it, a number of problems may arise, especially when the internet speed slows down. Some trading terminals need broad band net connection. Therefore, it is advisable to have both types of connections – Light Version, which works with internet connection along with Broad Band Fully Loaded Trading Screen Version.

Keep an eye on security…

Stock Broking terminals take all security precautions for online transactions. Investors have to keep confidential with them their user name and password and never disclose them to others. Under no circumstances, do any online transaction in your trading account in Cyber Café. Prominent brokerage organisations periodically review their security arrangements.

Facilities in online stock broking

* Research reports and transaction related information will be received through Email.

* Daily market reports will be received.

* Your bill and transactions details through Email.

* Credits and debits to your account, Depository Account details will be received in electronic mode. No paper use at all.

* In case it is not possible to do transactions through online, problems can be got solved through Call Centre or the Branch Office.