Features of trading account

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The stock market has consistently provided investors with sufficient returns on their investments. As one of the most profit-oriented asset classes, equities have overtaken almost every financial instrument based on return on investment. Not just equities, the recent boom in private companies wanting to list through IPOs have also created a lucrative investment path, which is why the stock market is witnessing the highest ever addition of retail investors.

However, if you are new to the stock market spectrum and want to invest in the shares of good companies systematically, there is no better way than to open a comprehensive trading account. This blog details the features of a trading account and how it is vital along with a Demat account in the process of stock market investing.

What is a Trading Account?
Previously, people would hold physical share certificates (a letter type sheet defining a share). It was a time when the stock market used an open outcry system. According to this method, traders who wished to buy or sell shares had to be physically present in the stock exchanges and communicate with the other parties verbally. However, ever since technology overtook the stock market, the open outcry system has been replaced entirely by online trading accounts.

A trading account facilitates an investor to buy and sell shares electronically over the internet. You can think of a trading account as a cashier who assists in transactions and the Demat account as the cash register, where the money is stored. A trading account differs from a Demat account because it does not store the shares but is vital in the process of buying or selling them.

What is the purpose of a trading account?
As long as financial investments are concerned, a trading account is one of the most important prerequisites. Whether it is intraday trading, short-term trading, value investing, tax savings, insurance or managing your overall investments; you will need a trading account. However, the primary purpose for an investor to use a trading account is to invest in stocks, bonds, derivatives etc. and make profits as a result of the price fluctuations.

Importance of trading account and why do you need it?
Since the investing process is now completely digital, it is mandatory for anyone who wants to buy and sell shares to open a Demat and a trading account for the following reasons:

  • Access multiple stock exchanges: An online trading account allows an investor to trade in multiple stock exchanges simultaneously. Through a trading account, you get to enjoy access to all the leading stock exchanges in India, such as the Bombay Stock Exchange (BSE), National Stock Exchange (NSE), Multi Commodity Exchange (MCX), and National Commodity and Derivatives Exchange (NCDEX).
  • Convenience: An online trading account offers unmatched levels of convenience. Trading solutions offered by new-age platforms like India Infoline come with a dedicated smartphone application. This enables you to access the stock market from anywhere in the world and at any point in time. All you need is a smartphone or a handheld device to keep track of your investments and buy or sell shares conveniently.
  • Hassle-free transactions: With an online trading account, you can smoothly and seamlessly conduct all of your stock market transactions. Right from fund transfers and placing orders to taking share deliveries and monitoring your portfolio, trading accounts make every aspect of share trading systematic and hassle-free.

What are the features of a trading account?
A trading account offers numerous benefits to make your trading experience quick, simple and hassle-free. If you open a trading account, you get to enjoy the following features of a trading account:

  • Investing, simplified: You can access financial securities from any exchanges available under the SEBI umbrella. The trading account creates a single platform for you to trade and offers the features of flexible trading.
  • Smart Tools: New-age trading accounts such as IIFL’s trading account gives access to innovative, investor-oriented smart tools to make informed investing decisions. These tools are daily reports, strategy builders, investment advisory services, reports, and advanced charts.
  • Investment customisation: With a comprehensive trading account, you get the feature to customise your investing experience at your convenience. Whether it is to customize your watchlists of stocks to track or creating individualised charts to gain insight into market movements, you can manage your trading accounts to fit your lifestyle without any friction.
  • Flexibility: A trading account allows you to trade on the go, anytime and anywhere. You can access your investments right from a PC or a smartphone anytime and manage, monitor them.
  • Quick and simple transactions: One of the best features of an online trading account is its ability to allow investors to avoid time-consuming trading. Thanks to a trading account, it takes less than a few hours for fund transfer and immediate access to buying and selling securities as soon as the funds are available.
  • Transparency: A trading account provides a detailed report of all the additional charges applicable to your investing process. It mitigates the risk for you to be overcharged by a DP or the bank and ensures utmost transparency in every transaction you undertake.

How to open a trading account with IIFL

With India Infoline, you get to enjoy a hassle-free and smooth trading account opening experience with minimal documentation. IIFL offers both online and offline modes for opening an online trading account. The following step-by-step guide will explain the account opening process in detail.

Step 1: Visit IIFL’s website or download the IIFL Markets app from the app store.

Step 2: Click on ‘open a Demat/trading account’ and fill in all the required basic details.

Step 3: Verify the OTP you receive on your mobile number and the email ID.

Step 4: Once the OTP verification is done, you will be required to fill in a trading account opening form.

Step 5: Once you have filled the trading account opening form, IIFL’s relationship manager will contact you to verify the details you have submitted.

Step 6: Upon completion of the documentation process and the subsequent receipt of all the signed forms, your online trading account will be made operational within 24 hours.

IIFL trading account fees and charges

Trading Account Opening Charges IIFL

Account Processing Charges

₹0

Trading Account Opening Charges [One Time]

₹295

Trading AMC [Yearly]

₹0 (for the 1st year)

Plan name

Zero Brokerage Plan

Minimum Margin

₹0

Monthly subscription

₹0

Brokerage Charges

Equity Delivery %

₹ 0

Equity Intraday/ Futures (per lot)

₹ 20 or 0.05%, whichever is lower

Nifty Options (per lot)

₹ 20

Stock/ Bank Nifty Options (per lot)

₹ 20

Commodity, Currency trading

₹ 20 or 0.05%, whichever is lower

Currency Options (Per lot)

₹ 20

Currency Futures (Per lot)

₹ 20 or 0.05%, whichever is lower

Commodity Options (Per lot)

Gold

₹ 20

Silver

₹ 20

Crude Oil

₹ 20

Copper

₹ 20

Zinc

₹ 20

Gold Mini

₹ 20

Access to services

Research Report

Yes

Intraday calls

Yes

Market Guru seminars

No

Trader Terminal EXE

No

Dedicated RM

No

Analyst/ Investment advisor meetings

No

Conclusion
Almost every stock broker offers a package deal: A Demat cum trading account. As both of these accounts are compulsory for an investor to start trading, it is easier for an investor to open them together. Once opened, a comprehensive trading account can provide ease of investing and ensure that your investments are regularly monitored and managed to increase profitability.

If you want to open a free trading account, you can look towards IIFL, which has over 22 years of experience in the financial field and caters to over 22 lakh customers. India Infoline (IIFL) offers its users a host of advanced and innovative trading platforms that perform with state-of-the-art technology such as Trader Terminal, TT Web, TT Iris etc.

Frequently Asked Questions
Q.1: What is gross profit in a trading account?

Ans: Gross profit in the trading account is the difference between the selling amount of all the shares minus the cost of share when initially bought. It is the process that an investor makes while trading and investing in the stock market.

Q.2: What are the uses of trading accounts?
Ans: You can use a trading account to buy and sell stocks, do intraday trading, short term trading, long term trading, commodity trading etc. Wherever there is a need to transfer funds to buy financial securities, a trading account is required.