Stock market is a lucrative opportunity no one would want to miss on. However, trading in the same requires an investor to be a little adventurous, a little bit cautious and a little knowledgeable. While we can make you adventurous by words, we can give you some knowledge that could caution you from doing the rash and learning something new. Let’s help you with the basics of stock market trading. And the first and foremost is the opening of a demat account to begin trading.

A Demat account is simply speaking a trading account that holds all the electronic certificates of all the shares, bonds, government certificates, exchange traded funds and mutual funds. The demat account number is quoted for reference for all the transactions in the trading world.

Step 1: You will be required to approach a depository participant (DP) for the opening of your demat. A DP in easy terms is the agent who helps you with the opening of the account through filling the form. There is a list of DPs listed in the websites of depositories: CDSL (Central Depository Services (India) Ltd and NSDL (National Securities Depository Ltd).

Step 2: At the time of the open of a demat account you are required to submit photocopies of your valid documental proofs as a proof of your identity and proof of address. You are also asked to enclose the latest photographs of the account holder.

Step 3: An agreement needs to be signed with the DP as a rule to the prescribed standard format which spells out the details about the rights and duties of the investor and DP. You would receive a copy of the agreement which will also give you information on the schedule of charges.

Step 4: The DP will open an account and provide you with your demat account number which will be required for all your trading in the future. The demat account number is also known as beneficial owner identification number (BO ID). All your trading activities, purchases/investments will reflect in this account. On selling of the security assets the demat account will be deposited with the amount.

A person can own multiple demat accounts under his name and there are no restrictions on this. Choosing of DP is also a matter of choice and convenience with no compulsion or guidelines for specific brokers.

You are expected to update your bank account details (bank account number, IFSC code) and postal address linked to your demat account as and when there is a need to ensure uninterrupted delivery of corporate correspondences, annual reports, notice of AGMs, dividends, interest as well as direct credit of funds.

So, what are you waiting, if you are interested go open yourself a demat account.