How to Buy and Sell Shares in India?

Let us inform you that you are not alone if you are concerned about stocks and shares or investing in the stock market. New investors with minimal experience are afraid of losing their complete investment or a chunk of it. Nevertheless, the risk can be reduced with information and smart planning. To do That let’s understand How to Buy and Sell Shares in India?

How to Buy and Sell Shares in India?

Companies initially issue an Initial Public Offering (IPO) before being listed on the stock exchanges. Officially, You can buy and sell shares of listed companies in India on multiple platforms including the Bombay Stock Exchange (BSE) or the National Stock Exchange (NSE) online or offline. To do so, you must use your broker to place an order to buy or sell shares on the exchanges.

Things Required to Buy and Sell shares in India

• Pan Card

  You must have a PAN card to participate in the stock market. PAN stands for Permanent Account Number. In India, getting a PAN number is a must for investing in any type of financial interaction. The Government of India issues a 10 digit alphanumeric number that serves as a legal ID proof. The PAN card is used by the tax officials to calculate a person’s taxable income.

• Stock broker

  When it comes to trading and investing in equities or securities, there are countless stock brokers that can assist you in the stock market. Before you begin to trade, it’s a good idea to spend some time researching different types of brokers like full time, online and discount brokers.

  However, Before choosing a broker, Check few things about the broker like their SEBI registration (Securities and Exchange Board of India), stock exchange membership, brokerage charges, technology, Customer care and so on.

• Bank Account

  You can’t buy stocks online unless you have a bank account. Your Demat Account is linked to your bank account through your Trading Account.You must place the necessary order via your Trading Account if you want to buy online stocks.

  The order will subsequently be forwarded to the stock exchange for clearance. Within 2 trading days of settlement, the stocks will be delivered to your Demat Account, and the necessary fees, or buying fees will be deducted from your bank account.

• Open Demat & Trading Account

  A Demat account, also defined as a Dematerialized account, is a type of dematerialized account. The original shares you own are dematerialized or transformed to a digital form in this step if you have any. While In the sharemarket, a trading account is designed to buy and sell stocks. You must open a legal demat account in order to facilitate buying and selling shares smoother.

  You will be required to complete an online demat form. You must verify the appropriate documents & scan them like Aadhar card, bank account and pan card to the brokerage firm with which you wish to trade. Your demat account will be set up after all of your paperwork has been thoroughly validated. The account can be used to buy and sell stocks, securities, and derivatives.

• UIN Number

  In India, A UIN stands for Unique Identification Number. For investors that transact with a capital of 1,00,000 or more, a UIN is required. A UIN is not required for ordinary or low-risk investors. Investors typically use their larger investments to purchase high-end blue chip stocks or shares of well-known corporations.

  When compared to inferior equities, higher innings stocks might guarantee you a richer return on your investment. Several blue chip stocks to consider investing in include Reliance, Nestle, Hindustan Lever, HDFC, and Britannia.

Process of Buying and Selling Shares in India

Your broker serves as a link between you and the stock market, allowing you to buy and sell shares. To Buy and Sell Shares in India, you need to inform your broker offline or online via app or website regarding the number of shares you desire to buy or sell & the price at which you intend to buy or sell them.

The stock broker buys or sells stocks on behalf of you accordingly from the stock exchange. It will take 2 business days from trading day to get the stocks in your demat account. However, Intraday trades are settled on the same day before stock market close.

Note

While in the process of buying and selling shares, the order is only valid for a certain period of time. Following that, the orders will be cancelled if not executed, and you will need to place new ones.

Things to keep in mind before Buying or selling stocks

Keep these things in mind after buying or before selling the sock:

• Put the funds from savings accounts to connected demat and trading accounts.
• Always use a research approach or advice to decide which stocks to buy or sell.
• Make a purchase or sell order for shares at a particular price.
• Review your positions in a frequent manner.

Advice for Beginners Regarding How to Buy and Sell Shares in India?

You can use the suggestions offered by the research team of brokers in the early days before deciding on your strategy of buying or selling.

You can register and open a demat account with a number of brokers or banks that offer full broker services, including stock tips if you don’t want to learn more regarding stock market.

Major ways to earn from Stocks

• Capital gains – Purchase a stock for a lower price and then sell it for an increased price.  It’s harder than it sounds, because even with the price-earnings ratio measured, you’ll never know when the price is higher or lower. Investing in high-quality stocks of strong businesses and holding them for a longer period of time is a simpler approach.
• Dividend – Companies may offer dividends if you hold on to your stock. They will first use NDSL or CSDL to determine who the stockholders are, and then deposit the dividend amount immediately into your account according to the record date.

Example

Consider the following scenario:

you bought 100 shares of Airtel for Rs. 550 each. You would earn a benefit of Rs. 200 per stock, or Rs. 20,000, if the price of the stocks rose to Rs. 750.

If the firm does well and declares dividends of INR 20 per stock, the firm will transfer INR 2,000 in your account for the stocks you own.

Conclusion

You must fulfill SEBI-mandated regulations when buying and selling shares in India. When trading in the stock market, you must constantly remember to find a reliable Stock broker like Zerodha, Upstox and Groww.

This is all from our side regarding How to Buy and Sell Shares in India? Let us know your views about how to purchase shares in india in the comment section.

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FAQ About how to buy sell shares online india

How to buy shares online without broker in India?

You are unable to buy shares online without a broker in India officially on your name.However, if you are not an indian you can do that by Participatory Notes. The stocks will remain in the name of FII profit and loss will be yours.

How to buy shares in India for beginners?

Open a Demat account and take advice from a financial adviser before buying and selling shares.

How to sell shares online?

To Sell shares you need to first buy them as short selling on delivery basis is not allowed in india without holding the stocks.

How to buy shares of a company?

Open a Demat account and take advice from a financial adviser before buying and selling shares.

How to buy shares in Zerodha?

Open a Demat account with them after placing an order online via kite app or website for the stock which you wish to buy.