How To Buy Stocks Online In India (2017)

How To Buy Stocks Online From Home
How To Buy Stocks Online From Home

Stocks market was difficult for common men because of lack of know-how. Internet has solved this problem. Authentic information about stocks are available on internet. People with limited savings can know about stocks. People can start buying stocks online with just Rs 500. Stock investment & ETF’s is perhaps the only investing tool that is both cheap and easy-to-do. Why so many people get attracted to buy stocks online?

Investing online means person is buying & selling stocks on their own. This gives them more control. Timing the market becomes comparatively easy; so returns also improves. Internet has made it all possible. Timing the market is in control and that too from comfort of home.

Compare stocks with Mutual Fund. Ease with which one can buy stocks online (compared to mutual funds) is fantastic. Compare stocks with real estate property. One can buy stocks with Rs 500 in pocket. But one may not be able to buy a property even with Rs 100,000 in pocket. So investing in stock can be really very attractive if you look at bigger horizon.

I’m complete opportunist, as of now people who do know me and my financial situations ask me, How can you make 1 crore from scratch in 3 years?

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Buying stocks at low price and selling them at higher price is no rocket science. It needs your  eagerness to make money and passion to learn. Learning the do’s and don’ts are your first step in online investment system or any money making stream. Understand economy from wider prospects, have sufficient amount in hand to invest and when you are sure just invest it.

Don’t let small failures in stocks investment become the reason to your financial insecurities. Accept your error and correct them. So enough lecturing, lets see how you can buy stocks online from home.

Let’s take 2 basic question on stocks investment and online trading of shares.

  1. How To Choose Best Stocks?
  2. What is the process of buying stocks online? or How To Buy Stocks Online In India?

1. How To Choose Best Stocks In India?

The rule of thumb to successfully evaluate stocks is to focus on its fundamentals. When fundamentally strong stocks are available at undervalued price only then grab it. But tough part is how to screen fundamentally strong stocks?

A company which is not dependent on debt to fund its operating expense are fundamentally strong. Another parameters that confirms fundamental strength of company is profit growth. Company shall increase its profits YOY(Year on Year) at a rate higher than inflation.

A fundamentally strong company is one that has majority market share in its sector. Look for Top 3 companies with highest sales turnover in its sector. A fundamentally strong company should also be very profitable. To check companies profitability look at its Return on Capital Employed (ROCE). Companies that enjoys high ROCE are fundamentally strong companies.

2. How To Buy Stocks Online In India 2017

1. Open Online Banking Account

The next step is to activate online banking facility. These days all banks have online banking facility. Banks like ICICI, HDFC etrade, AXIS, etc provides online banking. Most of us already maintain bank accounts in these banks. Even if your bank does not provide online banking facility you shall not worry. Banks who do not offer online banking has online fund transfer facility. But I will suggest to maintain online banking facility. This will prove very useful when stock trading is done more frequently.

2. Open Online Trading Account

Once one has online banking, they must link it with a online trading account. Only brokers are allowed to buy/sell stocks in stock market. Brokers are members of stock exchange. These days online-brokers are more prevalent. Companies like HDFC Securities, AXIS Direct, ICICI Direct are few well known online brokers. Opening an online trading account with these brokers is requried. Once trading a/c gets operational, next step us simple:

3. Open Online Demat Account

Stocks can be traded online. They are also stored in dematerialized form. Initially, shareholders used to keep share-certificates as proof of holding. These days share-certificates are kept in demat accounts.

These days opening a demat account to trade stocks is essential. Demat account are like banks but instead of keeping money they keep stocks in dematerialized format. To open a demat account one should approach SEBI registered depository participants.

Names of few renowned depository participants are: Allahabad Bank, Andhra Bank, Axis Bank Limited, Bank of Baroda, Bank of India, BNP Paribas, Canara Bank, Citibank N.A., City Union Bank Limited, Corporation Bank, Dena Bank, ICICI Bank Ltd, IDBI Bank Limited, Kotak Mahindra Bank Limited, Punjab National Bank, State Bank Of India, UCO Bank, Union Bank of India, Yes Bank, etc…

4. Login To Your Account And Buys Stocks

Online trading accounts allow web-portals based trading. These portals gives indirect access to stock exchange (like BSE & NSE). Indirect access to stocks-market enables people to buy stocks online.

User gives command to online brokers (using web portals). Information about stocks buying or selling is done automatically by the online brokers.

Conclusion: How To Buy Stocks Online

People tend to make fast money but make sure you don’t fall in that trap. Try to evaluate your risk factors and always trade under your affordability. This way you will stay intact with basic principles of investing in stocks. So try buying stocks online and evaluate your purchase every time you invest.