What is a trading account?

A trading account is used to place buy or sell orders in the stock market. Since 2000, the stock markets have become electronic. This means, trading is now conducted online. Each trading account has a unique trading ID which is used to perform online transactions.

A trading account is opened with a stock broker. Through a trading account, you can directly place orders online or instruct your stock broker to do it. These orders will automatically be directed to the exchange through the stock broker.

How is online trading done in the share market?/How does a trading account work?

You need a trading and demat account to trade in the stock market. A trading account acts as a link between the demat and bank accounts, as cash is involved in the buying/selling of shares. When an investor wants to buy shares, he places an order through his trading account. The order is processed by the stock exchange and the shares get credited to his demat account. Similarly, the cash required for the purchase is debited from his bank account. To put it simply, a demat account stores the shares purchased while the trading account places orders and does the cash settlement.

Click here to explore differences between a trading and demat account.

Participants in stock markets could be beginners, experts or professionals. Before you choose a broker to open a trading account, remember to compare services and trading platforms. You should ensure the broker has qualified dealers, and trading terminals or apps that are easy to use.

Are you a first time trader? You may want to have a look at our Knowledge Bank for easy explanations of trading concepts and terms.

Benefits of a trading account?

You now know that 3 accounts are involved in buying and selling shares. Some brokers provide all 3 accounts in one service. Such a 3-in-1 account saves time and processes involved in trading. Here are some advantages of Kotak Securities 3-in-1 account:

• Something for everyone Whether you are a trader, investor or self-trader, we have trading platforms, research, and products customized for your needs.
• Smart investing solutions You don’t need deep pockets to invest! Find innovative products like Small Case and Auto Invest for regular, consistent and specific investment goals.
• Zero hassle trading Don’t divert precious time from your trades! Transfer funds seamlessly with linked trading, demat and bank accounts.
• Award winning research Get research that helps you make the right decisions! Its award winning and backed by first-rate analytics.
• State-of-the-art platforms Analyze markets and trade across any device of your choice – from mobile app to desktop!
• Dedicated dealing support We have a dedicated desk of qualified dealers to trade on your behalf. All you have to do is pick up the phone.
• Client focus Your needs are our priority! Our accessible and friendly customer service is just a phone call away.
• Added perks from Kotak Mahindra Bank With the 3-in-1 demat account, enjoy all the benefits of a Kotak Mahindra Bank account like high interest rates and instant fund transfers.

How to open a trading account?

• Select broker or firm
• Compare brokerage rates and services provided
• Approach selected broker online/in-person
• Fill the account opening & KYC forms
• Submit proofs of identity and address
• Verify your details with the broker’s representative
• Get your trading ID and account details
• Place buy/sell order

Documents required to open a trading account?

You need to provide a proof of identity and address to open a trading account. Here is a broad list of documents that can be used as proofs.

• Proof of identity

  PAN card, voter's ID, passport, driver's license, bank attestation, IT returns, electricity bill, telephone bill, ID cards with applicant's photo issued by the central or state government and its departments, statutory or regulatory authorities, public sector undertakings (PSUs), scheduled commercial banks, public financial institutions, colleges affiliated to universities, or professional bodies such as ICAI, ICWAI, ICSI, bar council etc.

• Proof of address

  Ration card, passport, voter ID card, driving license, bank passbook or bank statement, verified copies of electricity bills, residence telephone bills, leave and license agreement or agreement for sale, self-declaration by High Court or Supreme Court judges, identity card or a document with address issued by the central or state government and its departments, statutory or regulatory authorities, public sector undertakings (PSUs), scheduled commercial banks, public financial institutions, colleges affiliated to universities and professional bodies such as ICAI, ICWAI, Bar Council etc.

Frequently asked questions

• QWho is eligible to open a trading account?
  A

  Any individual, Hindu undivided family (HUF), proprietary firm, partnership firm, or a company can open a trading account.
• QHow soon would my trading account be opened?
  A

  A trading account with Kotak Securities is opened within 2 weeks of receiving the completed application form and documents.
• QWhat are the types of investments that I can make using a trading account?
  A

  A trading account can be used to invest and trade in shares, derivatives, mutual funds, commodities, ETFs and more.
• QCan I open a joint trading account?
  A

  Yes, you can open a joint demat and trading account.
• QCan you open a trading and demat account with different brokers?
  A

  Yes, you can open a trading and demat account with separate brokers. However, it is advisable to get a demat, trading and bank account with a single broker. Multiple accounts require you to login to different platforms every time you want to place an order. You also have to manually transfer funds from your bank account to trading account. This could be inconvenient and time consuming.