To buy and sell stocks in the Indian stock market, you will need a demat and trading account. A stockbroker is necessary to trade stocks because the broker will provide the trading account through which you will place your trades.
What is stock trading?
Stock trading is merely buying and selling stocks in order to gain from the difference. Stock trading requires a Demat account from which you will place the buy and sell orders. Trading involves a wide range of techniques such as swing trading, intraday trading, options trading, futures trading, etc. Different traders use a mixture of these trading techniques to reduce the risks. For example, an investor can hedge his holdings with the use of an options contract. Similarly, swing traders purchase a particular stock for a couple of trading sessions and sell it to gain from the underlying.
Is a stockbroker required for trading in stocks?
In short Yes, a stockbroker is needed to trade in stocks. To buy and sell a stock, you need to have a ‘Trading’ and ‘Demat Account’. A stockbroker provides the necessary accounts with which you could place your trades. Therefore, to go long or short in any stock, you need to have a demat account.
In India, you will have to open an account with a stockbroker or a bank-based broker to get a demat and trading account. Once you get a demat account, you will be eligible to trade stocks and derivatives
Some of the requirements for a demat account in India
1. Bank Account
2. Mandatory documents like PAN Card
3. Proof of identity and proof of address
4. Recent photograph and signature (offline or online)
Once you fulfill these criteria, you can easily open a demat account and trade in stocks, derivatives, bonds, etc.
Alternative options
There is another way through which you can buy and sell shares without a stockbroker. You can do so with Mutual Funds. Mutual funds won’t let you pick particular stocks, but you can buy and sell a group of stocks as picked by the fund. You can trade in mutual funds without a stockbroker and without a demat account. The AMC (Asset Management Company) will take care of all your deposits and withdrawals. Through certain mutual funds, you can bet on a particular sector or the overall economy and profit out of it.