Different types of trading account in India

If you follow the stock market, you’ve probably heard of trading accounts. A day trader’s primary account is frequently a trading account. Equity shares are often bought and sold using trading accounts. The ancient outcry stock exchange method has been replaced by online transactions as the web takes over every facet of life. You may thus get a trading account in order to make orders, and with the assistance of a licensed stock market broker, you will be able to trade easily. The following are the major types of trading accounts available in India. 

Regular Trading Account

Every time a client purchases securities using this sort of trading account, he is required to pay the whole price. An investor who uses a cash-type trading account owns all the securities and money in the account; they are not permitted to borrow money from their brokers.

Margin Account

In contrast to the regular trading account, a margin account allows for broker borrowing by the investor. In comparison to solo financing, this form of account allows the investor the advantage of purchasing additional securities. However, this benefit comes with risk when using a margin type trading account. If the value of your shares falls, you might lose money if you have a margin trading account. The brokers also have the authority to sell your stocks in a margin account in order to make up the loss.

Account for Trading Commodities

The commodity market uses this kind of trading account. A commodities market is a location where trading in raw materials for the economy rather than produced goods takes place. Therefore, this kind of trading account makes it possible to buy and sell such basic economic goods (like agricultural produce, gold, oil, and so on.)

Two-in-one and three-in-one trading accounts

Three different types of accounts are required for all investors: trading accounts, bank accounts, and demat accounts. You first put funds into the trading account from your bank account. Through the trading account, you may purchase shares using this money. The Demat account will be used to hold these shares. A 2-in-1 account with a combined trading and Demat account is something that certain brokerages provide.

This kind makes it simple to purchase, sell, and transfer shares to a Demat account. Similar to this, a 3-in-1 account combines a bank, trading, and demat account. You may easily transfer both money and shares using a 3-in-1 account.

Account for Trading Shares

Traders can use it to purchase and sell shares. So, only shares may be used with this sort of account. This account cannot be used for any other kind of trading transaction. Although you may use this kind of account to perform many other kinds of share trading.

Options Account 

People can trade securities using this form of account at a particular time and price. Additionally, this kind of account may only be created if the broker is confident in the investor’s high net worth.

Trading Account Types According To The Services Offered

Based on the kind of services they provide, we can categorise trading account into broadly into two types. 

Discount-Brokerage Account: A basic sort of trading account called a discount broking account doesn’t come with any add-on services. Except for the call-and-trade function, brokers who provide this sort of trading account do not provide offline trading. But the majority of these services are paid. This kind of trading account transacts in enormous quantities for incredibly minimal fees. Only trade transactions may be carried out with this kind of account. Investor advising services and research reports are not provided by them. Due to their minimal operating expenses, they enjoy low brokerage fees.

Full-service Account: This kind of account offers additional services on top of the standard trade execution. In situations where you are unable to make trade judgements, advising services can be used to get financial counsel. Integrated research techniques may also be used to investigate market trends and come to informed judgements.

I hope this post has helped you better understand the many types of trading accounts so you can establish one that meets your financial goals. If you are looking for a suitable trading account that can help you to invest in the share market, you can go with reputed firms like Kotak Securities. It is a leading financial organisation of the country that offers a wide array of services. The Kotak Stock Trader App is the best trading app in India. It has several features along with essential trading tools. You can open your trading account online within minutes and start investing.

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