Demat account
- Credited with shares purchased
- Debited with shares sold
Trading account
- Debited with purchase price
- Credited with sale proceeds
What is a trading account?
You will need both demat and trading accounts to trade in the Indian stock markets. While the demat account helps in storage of digital (electronic) assets like shares, mutual funds, bonds, debentures, ETFs, and gold bonds, the trading account facilitates the actual buying and selling of these assets in the exchanges.
Why open an m.Stock trading account?
You can too. Here’s how!
| Segment | m.Stock | Discount Broker | Traditional Broker |
|---|---|---|---|
Intraday 960 orders | ₹0 | ₹19,200 | ₹48,000 |
Options 24,000 orders | ₹0 | ₹48,000 | ₹1,80,000 |
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FAQs
A Demat and trading account are both mandatory requirements for trading in the stock market in India. However, contrary to popular belief, they are 2 separate accounts and serve different purposes. While a Demat account is quite similar to a bank account and is needed to hold/store securities such as shares, ETFs, mutual fund REITs, etc. in a digital format, a trading account is required to buy and sell them on the stock exchange.
Both these accounts work in tandem and are usually linked to each other for seamless trading. However, it is also possible to open a Demat account alone if the idea is just to store your securities for the long term. Similarly, it is also possible to open a trading account alone and trade in futures and options, as this form of trading does not require taking the delivery of the stocks, hence not requiring a Demat account.