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Contrary to popular beliefs, creating wealth in the stock market is no rocket science, especially if you are aware of the vital do’s and don’ts of an online share trading account. An online trading account is an extremely important financial account where transactions involving your hard earned money are carried out. Due to the financial implications involved, a trading account is as important as a bank account. It is very important that traders, whether beginners or seasoned, follow certain best practices pertaining to their online share trading account.
Let’s look at some of the most important dos and don’ts of an online share trading account.
Must Do’s for your Online Share Trading Account
Maintain latest Mobile and Email Address on your online trading account
- This is important because all updates and transaction alerts by Exchanges, SEBI, etc shall be sent to your registered mobile and email address. In case your details are not updated, you might miss out on critical communication.
Make payments by bank transfers and account payee cheques only
- Make the payments by account payee cheque in favour of the stock broker. Don't issue cheques in the name of sub-broker/Authorised Person.
Make sure you have completely clarity on brokerage and related charges
- Check out the brokerage calculator for any clarifications and also the detailed charge list for all online share trading transactions.
Check the contract notes issued by the broker
contract note shall be issued to you by your broker every time you make a transaction. A contract note is issued within 24 hours of the end of trade. Please make sure that you are receiving your contract notes in a timely manner and make sure that there are no errors in the same. In case of any errors, immediately escalate them to the stock broker.
Maintain upfront margin for your transactions to avoid penalties on account of shortfall
- You must ensure that your online share trading account is adequately funded before trading so as to avoid any penalties levied by the stock exchanges on account of margin shortfalls. You can check out the margin requirement for trading on Samco’s span margin calculator.
Don’ts for your Online Share Trading Account
Don’t share passwords of your online trading platforms with anyone
- In case you have lost your password or suspect that someone has it, immediately contact your broker to change the password.
Don’t give access to your trading account to an unregistered entity for informal portfolio management
- You may be approached by several promotional “experts” who will try to offer and promise you high returns and may ask for your account access make transactions to generate these returns. Do not get lured away by such high returns and share your account access to a third party.
Don’t deposit cash into your online share trading account
- Depositing cash in your online share trading account is not advisable. Always fund your online share trading account via netbanking or cheque and avoid cash transactions.
|Make sure your email and mobile number are up to date||Don’t allow anyone to access your online share trading account in lure of high profits or assured returns.|
|Make sure your bank details are up to date in your online trading account. Make transfers to your trading account only by these registered bank accounts.||Don’t share your account credentials and passwords with anyone|
|Check all your contract notes daily||Don’t deposit cash in your online trading account|