In this era, when the earning is the prime motive of life, there is hardly anyone who is not interested in earning from the stock market. It is a known venue for those who have an insight of trading and know how to move in volatile market safely. There are various options for a trader if he is interested in stock trading. He can go for cash segment or derivatives as per his choice and knowledge as well as availability of capital. There are people who just want to make money on daily basis in this market and hence they prefer to go for the intraday trading in the cash segment.
Before jumping in trading, there are some requirements that one needs to fulfil. The trading and demat account opening is the primary requirement that a trader needs to satisfy. These accounts can be opened with any of the stock trader or stockbroking firm easily. Many of the brokers also offer free demat account these days as there is only an annual maintenance charge one needs to pay and that is also not so high. But if the trader offers a free demat account, he can attract the clients, and hence overall base of his clients can be increased at a low cost. Hence many stock traders offer this account as a weapon to increase the client base and overall business at the lowest cost.
One can go for any of the two segments as discussed earlier. However, for a trader who wants to employ limited capital, take a limited risk and still want to earn some good profit can go for the cash segment transactions where he can either fetch regular profit by intraday trading or create a good portfolio with the help of delivery based trading. In the cash segment, the intraday trading option is available where the trader can buy the shares in the session and sale them in the same trading session only. He can also go for the reverse trade which means first sell the shares at a high rate and then buy them at a low rate which helps him fetch a good profit. With each trade, he needs to pay a certain amount as brokerage to the concerned service provider. In the delivery option, he can buy the shares at any price and hold them for some period which may range from a few days to a few years.
These shares are parked in the demat account for some time and the day when one wants to sell them bring them to the trading account. The intraday trading helps one to have benefits of a change in share prices on the same day while the delivery based trading helps one to have the change in prices over a period. During this period one may also get other benefits such as splitting of shares, bonus shares and dividend declared by the company if there is any. Hence those who want to earn good profit may go for the long-term holding of shares.