The Indian stock market is an order-driven market where market makers bring enough transparency in the trading system. Brokerage firms are the market makers that display all buy and sell orders in order to brin.
Most of the orders in the trading system execute on two stock exchanges – the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). Both exchanges compete for the order flow but work with the same trading mechanism. No individual can buy or sell securities directly through exchanges. All trading orders mg transparency. They help to keep the financial markets liquid. The Securities and Exchange Board of India (SEBI) has the authority to regulate and supervise the stock market in India.
must be placed through a brokerage firm. You need to open Demat account online first to buy and hold securities then you can start investing.
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Eligibility Criteria
Let’s highlight important aspects of investing and trading such as eligibility for investing in the stock market, accounts required for trading, the minimum amount to start investing etc.
- Minimum age to start investing in the Indian stock markets
There is no age limit for investing and trading in India. An 18+ investor having a PAN card can open his own brokerage accounts – Demat account and trading account. An investor less than 18 years (minor) can also open Demat and trading accounts by submitting the documents of their guardian. The guardians can open brokerage accounts in the name of minors. So, students can also invest by following the rules for minors. But consider the brokerage rates that vary from broker to broker.
- Minimum limit to trade stocks
The stock markets are flexible in terms of investment amounts. There is no minimum and maximum limit of investing is defined in trading rules. You can trade the stock on NSE or BSE as low as Rs. 0.5 to as high as Rs.58,000, for instance, as in the case of MRF share.
- RBI Rules for NRIs and Foreigners
RBI allows NRIs, Qualified Foreign Investors (QFIs), foreign institutional investors (FIIs), and Persons of Indian origin (PIOs) to invest in India through the portfolio investment scheme (PIS). They can trade stocks and convertible debentures within the prescribed ceilings that are subject to the approval of the regulating authority, except in the prohibited sectors.
How to invest in the Stock Markets?
No matter in which category of investors you are fallen in, brokerage accounts are the mandatory and fundamental element of investing and trading in the stock markets. Find a registered stockbroker and open a Demat and trading account and link it with your savings account to facilitate securities transfer in electronic form.
What is Demat Account?
A Demat account is required to hold stocks in dematerialized form i.e. electronically. Whenever you will sell or buy stocks through your trading account, it will be debited or credited in your Demat account.
What is Trading Account?
The trading account is used to buy or sell securities in the stock markets. This is the primary account for intraday traders who close their position within the same trading session.
One can have multiple Demat and trading accounts to maintain their investment portfolio.
How to open a Demat Account and Trading Account?
You should open the brokerage accounts such as trading and Demat with NSE/BSE registered brokerage firms. Following are requirements to start brokerage account opening process:
- KYC Form
- Passport Size Photographs
- PAN card
- Identity proof
- Address proof
- Cancelled Cheque
Submit all required documents with the broker and wait for verification. After completing the verification process, you will be provided with your account details and you can log in to start investing without age limit and investment amount limits.
