Online Stock Trading Online stock trading is stock trading through the Internet. You use the Internet as a medium for trading. Before you start online stock trading you have to equip yourself with the following pre requisites. Through online trading you can do online equity share trading, online option trading and online futures trading. Read more ...

An Internet connection: A broadband Internet connection is best for online stocks trading. These Internet connections are comparatively faster to the connections using a telephone. In online trading you need to make fast decisions. Orders have to be placed at the appropriate time. All these are possible only when your Internet connection is responding fast. For this you need a connection with adequate bandwidth and a broadband connection can provide this.

A Bank Account: A Bank account is required for carrying out your trading activities. It is in this account that you will deposit and keep your capital for stock trading. When you are placing an order to buy stock the money will be used from this account for making the payments for settling the trade. Similarly, when you are placing an order to sell stock the proceeds from the sale will be credited to this account.

A Web Trading Account: For trading on the stock exchange you will have to use a web trading account. This account will have a login user ID and password. Before you can trade, you will login into this account and then select the stocks, enter the details such as quantity, type of order, security, etc., for placing an order to either buy or sell. The security can be equity shares, options or futures.

Demat Account: A demat account is required to keep track of your securities. The shares you buy are credited to this demat account and when you sell them they are debited from this account. This account is similar to your bank savings account. In a bank savings account it is money that is deposited and withdrawn. In the demat account it is shares that is deposited and withdrawn.

How to open these accounts: Banks provide all these services at one place. Banks such as ICICI, IDBI, PNB and quite a few more provide all these services. You can go to them and open bank account, web trading account and demat account. For Internet you have to go to an ISP – Internet services provider like BSNL, MTNL, Reliance, Tata Indicom and Bharti Airtel.

You can open web-trading account with broking firms such as Kotak Mahindra and ShareKhan.. When you open with them you will have to open a demat account and a banking account with a bank. Usually these broking firms have tie ups with banks. Your demat account and banking account will be opened with one of them. After opening all the three accounts will get linked to each other in order to facilitate online trading.

The names of banks and broking firms above are only an indicative list to give you an idea. You will find many more who are providing these services. It is very important that you do a proper analysis/research and then take your decision to deal with them.