| Stock markets all over the world are booming once | | | | also give you a facility to trade against your shares, |
| again and it is but natural that you must have started | | | | which are lying in your DEMAT account opened with |
| receiving tons of marketing calls, emails and SMSes | | | | them. |
| from different stock trading companies and online | | | | 4. Online Trading Platform |
| stock brokers. With thousands of online stock trading | | | | Nowadays, online stock trading has become very |
| offers, picking the right broker is often a daunting | | | | common and popular. However, there are different |
| task especially if you are just beginning to trade in | | | | methods of online trading, ranging from simple |
| the stock markets. Here is a guide that will help you | | | | web-based applications to high-end online stock |
| in focusing exactly what you should look out before | | | | trading platforms. Most of the brokers allow you free |
| you take the decision to open stock trading account | | | | online trading with their web-based applications but |
| in India. | | | | they may charge you software license fee, (monthly |
| 1. Account opening charges and documentation | | | | or one-time) for allowing you to trade through their |
| Find out what are the one-time charges for opening | | | | state-of-the-art online trading platforms. If you opt |
| a trading account and a DEMAT account. Make sure | | | | for online trading software, you should ask for a |
| that you can fulfill the documentation part, that is, | | | | demo of online stock trading system. You might as |
| you have the PAN card and address proof. Besides, | | | | well request the broker to give you dummy trading id |
| you have to sign couple of legal documents such as | | | | and password for few days to get an idea about |
| broker-client agreements and POA (Power of | | | | various features and tools of the online trading |
| Attorneys), which mandate court stamp fees. | | | | software. Some of the latest online trading platforms |
| Therefore, ask your broker what are the extra | | | | provide you multiple market watch, market depth, list |
| charges (if any) for the documentation. | | | | of top gainers/losers, list high volume scrips, real-time |
| 2. Charges - Brokerage, DEMAT and other statutory | | | | charts and many other analytical tools and calculators. |
| charges | | | | 5. Funds and Securities Pay In and Pay Out System |
| Ask for detailed information about brokerage charges | | | | Make sure that the broker has a completely online |
| for intra-day, delivery, future and options | | | | back office, which is essential for monitoring your |
| transactions. Nowadays, with fierce competition, you | | | | funds and stocks and for checking the historical |
| could easily negotiate brokerage charges. For Day | | | | reports about your transactions. Look out for the |
| Trading, and Future and Options, you could easily | | | | brokers that provide the facility of real-time funds |
| fetch brokerage @ 0.005 to 0.05% and for Delivery | | | | transfer and online funds withdrawal. Check out if the |
| Transactions, the brokerage rates vary from 0.2 to | | | | broker has tie-up with your bank so that it becomes |
| 0.5% depending upon the volume of transactions. | | | | easier for you to manage your funds. |
| Check out the minimum brokerage amount payable | | | | 6. Contract Notes |
| by you and the details of statutory charges such as | | | | SEBI (Securities and Exchange Board of India) has |
| ST (service tax), STT (Securities Transaction tax), | | | | made it mandatory to issue contract notes in the |
| Turnover Tax, Stamp Duty and Exchange | | | | specified formats. Find out how your broker will |
| Transaction Charges. Find out what are the various | | | | provide you the contract notes. Most of the online |
| types of charges for DEMAT account, which include | | | | brokers provide ECN (Electronic Contract Notes) free |
| Annual Folio Maintenance charges and transaction | | | | of charges; however, many brokers will levy some |
| charges. You must be aware about all these charges | | | | charges for delivering physical copies of contract |
| because it adds substantially to your expense side | | | | notes. |
| and hence can reduce your profits. | | | | In the End: |
| 3. Margin System | | | | Apart from all the above factors, find out the |
| Many brokers allow you to take exposure in the | | | | reputation and trustworthiness of brokers from the |
| markets for day trading just by paying a small | | | | actual users through online forums where you can |
| amount, called as margin money. Depending upon the | | | | learn about broker reviews. You may also visit |
| broker, you can get exposure from four to six times | | | | Financial Awareness Portal for reviews and |
| the margin amount. Some of the online stock brokers | | | | comparisons of the top online stock trading brokers. |