The trading in the stock market offers a huge opportunity to the traders to earn as per his requirement. It is the field where the probabilities of earning a huge profit are there, but one has to be careful as there is also risk associated with each trade. However, the trader needs to be careful while going for the trading in this market. One needs to have own research for the concerned shares before going for the day trading or delivery based trading. For any trader, it is much required to have at least one trading and a demat account. The demat account is required for holding the shares purchased for the long term as they cannot be kept in the trading account as per the guidelines provided by the regulatory authorities.
The trading is carried out when the market is on. There are specific time frames provided during which one can trade in different shares. The trading can be done in the trading account only and hence if one does not have a trading account he needs to get it opened with a valid stockbroker. The same is the rule for the demat account as well. For trading, there are charges levied by the service providers which are primarily known as broking charges. For the demat account, there is an annual maintenance charge only, and it is recurring in nature. The brokerage is to be paid whenever one goes for any transaction irrespective of nature whether it is an intraday trade or delivery based. Hence every trader tries to have an account with low brokerage so that he does not have to pay much of the expenses and can earn a handsome profit on a regular basis. As the brokerage is an expense, control on it can help one get more profit with every trade.
The trades and accounts:
For the trading, there are two segments; the cash and derivatives. Those who want to earn little profit at moderate risk prefer to go for the cash segment. One can trade here in an intraday segment or delivery one. In the intraday segment, the risk is limited to the number of shares traded in and that too to the extent the value of shares is reduced. Hence one does not need to worry much in this type of trading. In the delivery based trading, one can buy the shares and hold them for a longer duration till the prices are reached to a level which he expects. Here the client just needs to make the payment of the share value to the broker and hold them. It is known as the safest option in the market.
In the derivative segment, there is no particular unit, but there are contracts. The contracts have an expiry date, and hence the trader must square off the position before the expiry of the contract. Here the opportunity for profit making as well as bearing loss is unlimited. Hence one has to be much careful while going for the trading in this segment.