What Goes Into Opening A Trading Account?

By Author: Maithili Pawar
Total Articles: 24
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Opening an online trading account is the first step to starting your trading stint with success. And this move is as important as everything else that is related to online commerce. Digital trading is an advancement toward daily trading with increased transaction speed, and paper-based documentation is non-existent.

Your online trading account is operated by your investment broker, and it can contain stocks, currency, securities and a variety of other types of investments. If your portfolio is very diverse and large, brokers will advise you to open separate online trading accounts for investments in retirement, long-term stocks, a margin account, and day trading.

How to open a trading account?

• Pick a good stockbroker or a firm. Make sure the broker is reputed, and take your orders on time. Note, stock market time is of utmost importance. Only a couple of minutes can change the stock market price. Make sure you pick a successful broker for this purpose.
• Compare brokerage rates as online trading account allows you to do so. Every broker has different charges, and you will be charged a certain fee for processing your orders. The rates will vary from each broker.
• Some offer discounts depending on the amount of trades they carry out before opening an account, taking all of this into account. Note, though, that you don't need to pick a broker that pays the lowest fees. Often good quality brokerage services offered can require higher than average costs.
• Next, contact the brokerage firm or broker and ask about the opening process for the account trading. The company will also send the account opening form and the Know Your Client (KYC) form to your house.

Don't blindly dive in. Make sure you have a cash reserve before opening your account to cover unexpected costs, such as a health emergency, a medical emergency of a loved one, a big car repair or work uncertainty.

Open your online trading account as you want to trade. For example, you'll need a brokerage account if you want to buy stocks, exchange-traded funds and future options. Check for recurring payments and maintenance costs. The market prices are very high so look for a business offering low trading commissions.

Documents required:

• One passport size photograph
• Proof of Bank Account:
a) Copy of Bank Statement
b) Copy of the first page of the Bank Pass Book
c) A cancelled cheque
d) Evidence of your Depository Participant/Broker
• Pan card copy
• Proof of Address:
a) Copy of passport
b) Copy of driving license
c) Copy of bank passbook
d) Confirmed copies of Electricity bill or telephone bill in the customer 's name

Author bio: Maithili Pawar is a financial expert with 5 years of experience in the investment banking field. In her free time, she writes on trading topics. In this, she has explained the process to open online trading account