What type of Trading Accounts are There?
Since there is so much information on the internet, one can easily develop a good hold on the financial world. The Indian stock market is no more an area for just the high-net-worth people or professionals.
Indeed, you heard it right. A person having a Demat and trading account can easily take part in online trading. If you are already interested in this now, you must not miss out on this post till the end. It would give you an idea about the different types of accounts for trading.
Commodity Trading Account
This is the type of account for trading that gets used for the commodity market. Talking about a commodity market, it is a place in which trading takes place in primary economic products rather than that of manufactured products. So, this kind of trading version allows buying or selling of such main economic products. These are like agricultural produce, gold, oil, and more.
This is the account for trading in which whenever a client purchases any securities, he should pay the complete amount. In case an investor has a cash kind trading account, all the securities, as well as funds, belong to the investor, and they don’t have the option to borrow funds from their brokers.
Offline and online accounts for trading
Offline account for trading never means the physical presence of the trader at the exchange or that of the broker’s office. Offline trading types of accounts don’t work through a desktop or even that of a mobile application. In case you want to trade offline you can easily call a professional broker or an agent and place orders. In the realm of online trading types of accounts, you can easily trade with the help of an application, that makes use of the web to relay the data to the brokerage.
Margin type of Account
Now, contrary to that of the other type in margin account the investor can easily borrow from that of the agent or broker. This type of account gets you if you are the investor, an edge to purchase more securities contrary to sole funding. But with this type of perk there comes danger along with margin kind trading sort of account. In case you own a margin type of account for trading, you can easily lose money in case the value of your securities goes down. Similarly, in a margin type of account, the brokers have every right to vend your securities to cover the overall loss.
Equity as well as Derivatives Trading
Speaking of the equity account for trading, the worth of the derivative relies completely upon some other agreed-upon security or that of an asset. This kind of account is opened with the trading member who belongs to the stock exchange.
So, whether you are inclined towards investing in LIC IPO or any type of account for trading; you should be informed about everything. After all, any type of trading is risky if you are not well-versed.