Wed. Dec 7th, 2022

Buy and sell stocks in India

This is how you trade stocks and shares easily and cheaply

A summary of the essentials

  • The best way to buy stocks and ETFs is by using online securities account.
  • Direct trading is frequently less expensive than the stock exchange when it comes to the purchase itself.
  • The benefits of direct trading include current prices and a low overall purchase cost.

This is how you do it

  • Choose a cheap securities account. We recommend the direct banks or forex brokers depending on where you live.
  • Carry out your securities transactions between 9:00 a.m. and 5:30 p.m. on trading days.
  • In the securities account search field, type the ISIN (International Securities Identification Number) of the security you want to buy. Choose “buy” and enter the desired quantity.
  • Select the most cost-effective direct dealer. If the price is the same everywhere, go with the cheapest option.
  • Check the total cost of your order before you buy.

trade stocks in india

In this guide

  1. Where to get the securities?
  2. Where do you buy and sell stocks?
  3. How do you buy and sell stocks and ETFs in direct trading?
  4. What do you have to consider when it comes to costs?
  5. Which ETFs does IntraDayStock recommend?

If you want to build long-term wealth, you should put some of your money into the stock market. Over a period of 15 years or more, fluctuations even out, and savers have a better chance of earning a higher return than they would with overnight or fixed-term deposits.

As a novice, which stocks should I invest in? This is most likely a question you’re asking yourself. Long-term investors should consider mutual funds that replicate a global stock index. They’re also known as ETFs or equity index funds. After you’ve decided on an ETF or other security, you’ll need to answer the following questions: What’s the best place to buy stocks? And what should I think about?

We’ll show you how to invest a larger sum at once in this guide. Continue reading the ETF savings plan guide if you want to save in small increments.

Where to get the securities?

You don’t have to go to a branch bank to buy stocks or exchange-traded funds (ETFs), and you don’t have to keep the securities safe. You almost always have to pay fees there, which you can avoid. Opening a free online securities account with a direct bank or a specialized securities dealer is preferable (online broker).

We recommend either depots, where you can buy shares or funds for a low price, or depots at online banks, where you can get a low-cost checking account and a low-cost credit card, allowing you to do all of your banking in one place.

Where do you buy and sell stocks?

Once you’ve established your depot, you can begin: You can purchase individual stocks, mutual funds, and exchange-traded funds (ETFs). In our ETF comparison, you can find out which index funds we recommend. In most cases, you can choose from a variety of online trading options, including stock exchanges and direct traders.

People or an online system coordinate the buy and sell requests of investors in exchange trading. Supply and demand are the factors that determine the price. When it comes to trading, the stock exchange is in charge of making sure everything is in order. More information is available in the stock exchange trading guide.

Banks or securities trading houses have certain shares or fund units in their portfolios when they engage in direct trading. The securities are then purchased by you, the investor, from these institutions. There is no external regulation, so banks or trading houses can set their own prices.

IntraDayStock recommends direct trading

Direct trading is the best option if you want easy access to stock trading. It’s best for investors who don’t want to follow any specific trading strategies and just want to buy and sell commonly traded, non-exotic stocks or ETFs.

Direct trading has several advantages over traditional stock exchanges:

  1. Buying on the black market is frequently less expensive than buying on the stock exchange. Many securities account providers have worked out special deals with direct traders, and you won’t have to pay any additional exchange fees.
  2. In most cases, you’ll get current – not delayed – prices that you can use to buy or sell right away.
  3. Your buy or sell order will be processed in its entirety. Unlike stock exchange trading, you do not have to pay for the same order twice.

How do you buy and sell stocks and ETFs in direct trading?

Purchasing stocks as a beginner is not difficult. When compared to buying securities on a stock exchange, direct trading requires far less information to be entered into the online fields of your portfolio. Each of the securities accounts we recommend has a unique user interface. However, if you know the most important steps, you will be fine anywhere.

1. Search for security by ID number

Enter the relevant securities identification number or identification number (ISIN) in the search function of your securities account to find the share or fund you want to buy.

2. Call up the order mask

The security’s overview page appears, along with a button or link prompting you to buy or sell. You’ll be taken to an order mask if you click on it. You can choose the trading venue and the number of shares or fund shares you want to purchase.

3. Select direct dealer

As the trading location, select the direct dealer with the lowest purchase price. For example, you can see the various direct dealers along with their buying and selling rates using the Flatex financial tip recommendation. If you want to buy, the ask price is important; if you want to sell, the bid price is important.

4. Only trade stocks when the stock market is open

For the time being, the price of shares and ETFs at the direct dealer is not regulated. As long as the stock exchange is open, it must not be worse than the stock exchange price. The opening hours are i.e. between 9 a.m. and 5:30 p.m. on regular trading days (no weekends, no public holidays).

5. Take note of any special offers

If you buy funds and ETFs on a specific trading venue, some direct banks offer special terms. ETF savings plans are eligible for a variety of promotions. We explain what ETF Savings Plans are and where you can save the most money in regular installments in our ETF Savings Plan guide.

6. If necessary, add a limit

A direct dealer will usually carry out your purchase or sale request right away at the price you specify. This means that the dealer either has the shares or fund shares in stock when you place your purchase order and sells them to you at the estimated price, or the transaction is canceled. If you want to be safe, set a “limit” – that is, a price at which you are most willing to buy or least willing to sell – if necessary.

What do you have to consider when it comes to costs?

Until the beginning of 2018, investors had to contend with the fact that the costs of buying and selling ETFs and funds were frequently unclear. Because different fee models are used by custody account providers: Some use fixed prices, while others base costs on the amount of money invested. Fees from the depot provider or special stock exchange fees are frequently charged.

Since February 2018, this has changed. At the time, an EU directive (Mifid II) went into effect, requiring more transparency when buying securities for end customers, among other things. Custody account providers have been required to list all costs associated with the purchase, a five-year holding period, and the subsequent sale before the actual purchase since then.

The majority of depot providers provide a link to cost information. Before you confirm the purchase of your shares or fund units, make sure to call this number. You have the option to change your mind if you have chosen an incorrect trading location that is too expensive.