Hello, Traders & Investors welcome to another article of “Multibaggercalls.com”. This article will help you to understand how to buy shares online.
“How To Buy Shares Online” is the most common question asked by new persons who want to enter the stock market.
Here you will get solutions for your every question.
If you think I miss anything to add in this article or you want to know anything extra then please ask in the comment box.
Before buying any shares/stocks, You need to study the stock market.
Because stock market investment is subject to market risk.
Now let’s start the first step to buy shares online.
Open a Demat/Trading Account.
The first step to buy shares of any company is to open a Demat/trading account with any stockbroker.
To buy or sell stocks on the BSE (Bombay Stock Exchange) and NSE (National Stock Exchange).
You need a trading account which comes with the Demat account.
Using a trading account you can buy or sell the stocks of companies easily.
The share purchased by using a trading account is stored in Demat account.
Demat account is like your saving account.
In your saving account, you keep your cash in digital form.
And In the Demat account, you can keep the shares of the company in digital form.
You can open Demat account very easily.
Where and How Open Demat Account?
You can open a Demat account at any bank. Almost all banks allow the facility to open a Demat account.
You can open your Demat account at any Stock Broker like Sharekhan, Zerodha, Angel Broking, Samco, etc…
As per my personal opinion opening Demat account at the bank are costly than stockbrokers.
You can go with Samco & Zerodha because the trading charges of Samco & Zerodha are comparatively lower than banks trading charges.
Because of Zerodha is charge Rs.15/- per trade and Samco is charge Rs.20/- per trade which is very low compared to others.
And Samco is offering free for the first year which is best for beginners.
Documents Required for open Demate Account.
As you all know, you need to submit some basic documents to open a Demat account.
If your opening Demat account at your Bank or with any stockbroker the document requirement is the same.
Below is the list of documents required for open demate account.
- Account Opening Application Form.
- Pan Card
- Aadhaar Card
- One Cancel cheque
- Passport Size Photo
All documents must be self-attested and you need to read all the terms & conditions carefully before opening the Demat account.
Choose Your Share/Stock
After opening a Demat/trading account, the Second thing you need to choose a Fundamentally and technically strong share/stock.
The share selection process is not an easy process.
It will take time to analyze and choose share/stock for investment or trading.
Before buying any shares you need to do proper fundamental and technical analysis of the stock.
Buying shares without analysis is like gambling.
How Many Shares You Want To Buy
The third step to buy shares is deciding how many shares you want to buy.
After choosing fundamentally and technically strong shares, You need to decide, how much quantity of particular share you want to buy.
You can buy 1 Share or 1000 Shares of any company as per your wish.
It totally depends on your budget how much shares you want to buy.
As per my personal opinion, if you want to invest in any stock, SIP (Systematic Investment Plan) is the best option.
And if you want to do trading in stocks then swing trading is better then day trading.
Because swing trading reduces risk trading for more details read our article Swing Trading Vs Day Trading | Which Is Better?
Select Your Order Type
The last step for buy shares is to select your order type.
You can see there are 8 to 10 order types available at the trading platform.
But, You no need to confuse about that, here I will explain, Which order type you need to choose.
Most traders/investors are using two types of Order type “Market order” and “Limit order”.
Market Order:- By using Market order, you are ready to buy shares at the best available market price.
If your palace a market order, You may get shares at different prices.
If you place an order for 100 shares at Rs.10/share, You may get 40 shares at Rs.11/share, 40 shares at Rs.9/share and 20 shares Rs.12/share.”
The market order is mostly used by long-term investor they don’t worry about small price changes.
Limit Order:- Limit order means controlled order If placing a limit order, It means you want to buy shares on your target price only.
If you want to buy shares of HDFC Bank Ltd. at Rs.2000/shares and currently, it trading at Rs.2100/shares.
You can place a limit order at Rs.2000/shares. Your order only will execute when the same ready to sell at Rs.2000/shares.”
The limit order is mostly used by day traders and swing traders. Who wants to catch a small price movement of a share price.
After selecting your order type, you can place an order at your trading platform.
You’re Now Owner Of Company
If you completed all the above steps, Now you are the owner of a company.
Yes! When you buy shares of a company, You will become one of the owners of the company.
You can sell shares, when you want to sell, there no restriction to sell or buy shares.
It totally depends on you, how much time you want to keep shares.
If the shares give you more return then you can keep that share in your portfolio.
If the fundamental and technical analysis is done in the proper manner then you share my become next Multibegger stocks.
In the above flowchart, I explained the complete process of “how to buy shares online” in easy steps.
I hope now you understand How To Buy Shares Online. If anyone has any queries or suggestion please ask in the comment box.