Knowledge Zone
Trading Account - Definition
Trading account is the account where you can buy or sell securities and derivatives products. In simple term, if you want to buy or sell a listed company shares (stocks) than you need to hold an Trading account.
You can holds your cash in your trading account so you can buy securities (shares) or trade in derivatives products with that cash.
These days trading accounts are three way accounts ( Bank-Trading-Demat) it means that your trading account is linked with your bank account and also with you demat account, so that the transaction remains smooth. Trading accounts are managed by brokers who having licenses from SEBI & exchanges to run there broking business.
Trading Account - Explained
a) Though trading accounts are traditionally thought to hold only stocks, now a trading account can hold cash, securities and other types of derivatives and funds investments also.
b) Investors can use a number of trading brokerage accounts. There is no limitation of opening of trading account on one individual name. Trading accounts are managed by brokers who having licenses from SEBI & exchanges to run there broking activity.
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