How to buy stocks / shares online?
There are 2 ways to buy shares once your trading account is opened with your broker.
The first way is to buy shares offline. You can walk into your broker’s office and
tell the dealer what you want to buy. The dealer will buy the shares and then confirm
the trade to you. At the end of the day you get the contract note and on T+2 it
goes into your demat account. The second method is the online method of buying shares
wherein you buy stocks by logging into your internet trading account and execute
the trade yourself. Once the trade is executed, your transaction is complete and
the shares will get credited to your demat account.
Here is the step-by-step process for buying shares online:
• The first step is to log into your trading account. Normally online trading platforms
insist on 2-level authentication. Apart from your user name and password, you will
also be required to impute additional security features like y our date of birth,
PAN Card Number, dynamic random code or a dynamic OTP sent to you mobile. This makes
your trading process more secure.
• Once you log into your trading account you can use the available research reports
and screeners to zero in on what stock you want to buy. It is always better to talk
to your financial advisor before buying any stock to ensure that it fits into your
long term goals.
• Once the stock is identified, your next step will be to place the order in your
trading account. Before placing the buy order it is always advisable to check the
supports and resistance levels of the stock to see if the stock has just broken
below the support levels. Ideally buy stocks when they sustain above support levels
or when they breach resistance levels.
• The next step is to actually place your order. You can check the stock-depth screen
to see what are the best offers available, in what quantity and at what price? Remember,
there will be hidden orders so the actual volumes could be higher than the volumes
visible in the screen. You can either place a market order or you can place a limit
order. It is advisable to place a limit order with price conditions set so that
you are not in for a surprise.
• Once your order is placed it will reflect in your order book. You can cancel or
modify the order as long as the order is not executed. Once the order is executed
you can check the actual execution on the Trade Book. This is a confirmation that
your order has been actually executed. Nowadays, you are also intimated by SMS and
email and the exchange also undertakes to SMS details of execution of transactions
by mapping your PAN.
• On T+2 day, you need to ensure that the shares bought by you are credited into
to you demat account. Download and keep a copy of your E-Contact note on a daily
basis and it can be used to reconcile with your demat holding statement at the end
of each month. The process of buying shares online is actually quite simple. It
also makes the entire execution of trades more transparent. What is more, it gives
you much control over the transaction and flexibility to transact whenever and from
wherever you want. That is, perhaps, the biggest advantage of buying stocks online.