What you need to know about a trading account?
The world is changing rapidly and technology has become an inseparable part of our lives. Not only has it changed the way we communicate but also the way we trade. Buying and selling shares and other securities through stock market has gained popularity in the recent past and if you are a a beginner in the world of investments, here is everything you need to know about it.
What is a trading account?
A trading account is similar to a traditional bank account that holds cash and other securities and is looked into by a broker or a dealer. While it was traditionally thought to hold only stocks, it can hold cash, foreign cash, securities and other types of investments. It is usually opened by a business professional to smoothly execute trade transactions, however, these days, it can also be opened by qualified non-professionals.
How to go about the procedure?
1. Find a broker- Finding a good stock broker is essential because he helps open the account and carries out all purchases and sales made through your account.
2. KYC- It is very important to get your Know your customer (KYC) forms filled at the earliest; these forms can be filled online, but hard copies are also available for the same
3. Submitting the documents- Submitting the pan card along with other essentials is a pre-requisite in order to open a trading account.
4. Get the trading account details- Once the trading account opens, it is very important to find out the other details about the account.
Salient features of a trading account include:
1. Consists of credit and debit side- This account has two sides- a debit side for keeping an account of all the incoming transactions and a credit side for all the outgoing transactions.
2. Systematic- The transactions are recorded in a systematic, chronological order which is easy to understand, even for laymen.
3. Calculates gross profit and gross loss- A trading account helps investors determine gross profit and the gross loss made by them.
4. Efficient- A trading account is very efficient to use because all sales and purchases are done through this account.
Now that you know everything you need to know about the trading account, what are you waiting for? You can begin investing in a hassle-free manner.