Knowledge Centre

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.