Owning a piece of a company’s future can be an appealing way of growing with the business and partaking in its profits. Buying shares can also help you diversify your portfolio further; it can be an effective and proven way of giving your money the chance to grow exponentially over the long run.
To build wealth, you may want to stay invested for the long run. Your investments in successful stocks can grow your money, help beat inflation, pay you regular dividends and give you the potential of accumulating wealth.
But to do all that and more, you need to know what goes into buying and selling shares. Let’s look at how your online demat account facilitates your stock investment journey and what it has to offer you to allow you to take charge of your investments.
How to buy and sell shares through your online demat account
When buying shares in the secondary market: To buy shares in the secondary market, you need to open a trading account that will enable you to make the purchase. Your online demat account stores the online stocks and shares that you purchase through your trading account. Therefore, it is crucial to understand that your demat account acts as a safe repository and is not a transactional platform or tool to buy shares in the secondary market.
You can only buy shares through your trading account. So when purchasing equities or any other kind of online securities, you must execute the transaction through your trading account. On the purchase of shares, the shares get automatically transmitted into your online demat account in T+2 days.
When buying IPO shares: While a trading account is needed to buy shares in the secondary market, you can purchase shares from your online demat account only if you are investing in an Initial Public Offering [IPO]. That’s because a company that issues its IPO is not listed on the stock exchange. Therefore, the stock of that company is not available in the secondary market. Hence, you can invest in the company’s IPO only with your online demat account. You will receive the respective shares credited to your online demat account on successful IPO allocation. Therefore, a trading account is not required when investing in an IPO.
When selling shares: However, it is essential to remember that you can only sell the IPO shares in the secondary market after you have received the shares in your demat account. Therefore, you will need a trading account to sell those shares.
So while your online demat account holds all your shares, securities, mutual funds, bonds, and similar assets traded on the stock market, it’s your trading account that enables you to buy and sell. However, if you’re only looking to invest in an IPO, you can do so with an online demat account.
Buying and selling shares is a lot more than just pushing buttons or entering your orders. Before making the decision, you need to review the basics of technical analysis and understand stock techniques.
ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. – ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai – 400020, India, Tel No : 022 – 2288 2460, 022 – 2288 2470. I-Sec is a SEBI registered with SEBI as a Research Analyst vide registration no. INH000000990.Please note, IPO related services are not Exchange traded products and I-Sec is acting as a distributor to solicit these products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing.