How is Demat Account different From Trading account?

 


Online stock trading is simple and easy. Just log in to the trading platform and select securities to buy or sell. The trade transaction will be completed within one click on the investors' end. Rest will be taken care of by your stockbroker and stock exchange. 

During the open outcry trading system, investors had to shout to buy or sell financial securities in the stock market. You can utilise technology-based online trading platforms in the current era and start investing in your desired financial products using your Demat account and trading account. 

Online trading evolved with online demat and trading accounts. Investors need to set up these accounts online with a registered stockbroker (Securities Exchange Board of India). A stockbroker is a financial intermediary that connects investors to stock exchanges. No investor can directly approach stock exchanges to buy or sell securities. 

These two brokerage accounts are interlinked and work together in the online trading system. Another required account is your bank account which is connected with your trading account to fund your trade or receive your trading profits. Altogether the online trading system based on demat and trading accounts facilitates safe trades and makes the stock market easily accessible. 

Go through the post for detailed differentiation between online demat and trading accounts and their working system in the stock market.


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