Demat Account क्या है, कैसे खोलें? - #12 MASTER INVESTOR - YouTube

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Hello my name is Mukul

And welcome to another video of Asset Yogi's Master Investors Series

Friends, in this video we are going to answer a very popular query

That what is a Demat Account and a Trading Account?

Although I have discussed these accounts in many of my videos

But We haven't done any dedicated video on this yet!

And because many questions come in front of us on YouTube.

What is a Demat account and what is a trading account,

why do we need to open these two accounts with the stockbrokers

and what is the purpose of both the accounts

So in this video, I will try to answer all of these questions

So If you watch this video till the end then

you will not have any confusion in the Demat account and trading account.

So let's start the video

Friends if you want to learn stock investing then you can follow Our master investing series

Which is free, you will get the link to the playlist in the description.

Apart from this, we have a very common query that if we want to invest or trade in shares,

And where should we open a Demat account and trading account for that,

I would recommend that you can open your account with a discount broker.

Where the brokering charges are very less and the delivery charges are zero.

The latest offers, recommendations, and links, where you should open a Demat account,

you will find its link in the description below

Apart from this, if you have any stock market-related queries if you need initial hand holding

then you can contact us on our Whatsapp number on 9292924848.

Also, you can contact us on our email id which will be found on the screen.

Some people among you want to invest

but they do not have time to research on investment,

They can also contact us on our WhatsApp number.

Firstly we will try to understand that why we need a trading account and a Demat account.

For this, we have to understand the short of history how stock trading was done earlier.

Earlier buyers and sellers used to go to the stock exchange

and there used to be physical trading of shares.

The buyer used to go with his cash, sellers used to go with his physical certificates,

whoever wants to sell his shares and if he has a requirement of cash, So he will bring his shares.

Let's take the example, suppose the seller says that I have 500 shares

and I am ready to sell it for ₹ 500, that's where the bidding starts.

Let's say 4-5 people are interested they will bid and

one person says I am ready to buy all these 500 shares for ₹400.

The second man says I am ready to pay 425 and the first one backs out and the seller says,

let's say, no, the seller says I will be reduced to the most at rupees 475.

So in this way, a buyer and seller agree on a price of Rs 450.

And thus the deal is done between the two. But what is happening in this whole process?

This process is taking too much time. And the negotiation process is very time-consuming.

Another major drawback here is that you have to go there physically.

If there is a stock exchange in Mumbai, the buyer and seller will have to go there and trade.

Or else they have to send their stockbroker there and the stockbroker will go there and trade.

But now this process has become very simple and this process has become online.

And for this trading and Demat accounts have been established.

earlier the buyer had cash

but now where the cash will store? Now the cash will be stored in your trading account.

The seller had physical shares earlier and that physical share is no longer available

because everything is online now so now where these shares will be stored

The shares will be stored in a Demat account What is meant by the Demat account?

it means dematerialized, earlier it was of physical form

and now it has become of dematerialized form that's why it is called Demat account.

So your online shares are stored in the Demat account.

Now let us understand this with an actual transaction, let's take an example.

Suppose this is a buyer who is interested in buying HDFC banks shares

and this is a seller and both are agreed at the same price.

And it will be traded on the stock exchange, we have also discussed this in our earlier videos

that there is no direct trade on the stock exchange.

And we also saw in our previous video that only the stock exchange is not involved here.

Here Clearing Member and Depository are also involved.

But for the time being, we assume that it is a combined entity

and it is a central agency where the trade is to be executed.

Now what the buyer requires, the buyer requires a savings account

The buyer has a savings account in Axis Bank.

Now the buyer can not trade directly from the Axis Bank,

For trade, a buyer will need another account and that is a trading account.

The buyer has to put some money in the trading account.

Let's say, he has 2 lakh in his bank account and he don't want to trade with 2 lakh,

he wants to trade with one lakh, so he will transfer that 1 lakh to his trading account.

Apart from this, the buyer needs a Demat account.

The shares that the buyer buys in the Demat account will be stored in the Demat account of the buyer.

We have talked in the previous videos that nowadays trading and Demat account are opened at the same place.

Which is a stockbroker, you do not need to go to different places to open these accounts.

I will tell you soon why one should not open these accounts at different places.

So the buyer needs to have a trading and Demat account with his stockbroker

I am writing here so that there is no confusion. suppose he has opened his account in ZERODHA

Similarly, the seller has a savings account

and suppose he has savings account in ICICI bank and he opened his trading and

demat account with his stockbroker and suppose he has opened his account with Upstocks.

Now So how the trade happens

Let's say the buyer has an initial amount of 1,00,000 rupees in the Axis Bank.

And he wants to trade with 50,000 rupees

So he will transfer these 50,000 rupees to his trading account.

50,000 is transferred to the buyer's trading account.

After deducting Rs 50,000 Rs 50,000 is left out of one lakh in the saving account

Now buyer says I have ₹50,000 in my trading account, I buy ₹20000 shares of the HDFC Bank out of it.

Here the deal of HDFC Bank is settled in thousand rupees.

The seller is ready to sell 20 shares of HDFC for Rs.1000

And the buyer is ready to buy the shares for ₹ 20,000.

So it will be executed on National Stock Exchange or Bombay Stock Exchange.

Here ₹ 20,000 will be deducted from the buyer's trading account,

then ₹ 30,000 will be left in the trading account of the buyer.

This ₹ 20,000 will be transferred to the seller's trading account.

Now 20,000 gets credited to the seller's trading account

Suppose the seller has some different stocks in his Demat account

Let's say he has 50 shares of Infosys, 100 shares of TCS, and 20 shares of HDFC for sale.

Because he got 20,000 rupees so the shares of HDFC will be transferred through NSE in the buyer Demat account

where the cash is being transacted here ?

The Cash is transacting in the trading account and the cash balance is showing here

and all your shares are coming in the Demat account.

So when will it come to the account?

Suppose the trading day is Monday, on Monday the trade was executed.

20000 trades.

So the share will transfer in t+2 days i.e. Wednesday ( it refers to Monday )

Why is there a cycle of T+2 days?

We have discussed earlier that Clearing Member and Depository are also involved here.

How is this whole transaction done? We will discuss this in our next video.

For the time being, HDFC shares have reached the buyer's Demat Account.

Let's say the buyer already has 30 shares of reliance, 50 shares of Tata motors,

and now additionally the buyer has 20 shares of HDFC in his Demat account.

In this way, the entire trade gets executed and this is the purpose of trading and Demat account.

Now let's assume the seller requires some cash and

let's say he has ₹ 20,000 in his trading account,

he wants to use some of that money, but he can't use it directly from the trading account,

So he has to transfer some money to his savings account,

and let's say he transfers ₹ 10,000 to his savings account,

let's say ₹ 1,00,000 is the initial amount in his ICICI account,

So here ₹ 10,000 is deducted from his trading account and

10,000 will be added to his ICICI savings account

The final amount in the trading account will be 10,000 because 10,000 is deducted from it.

This 10,000 is added to his ICICI savings account so its total will be 1,10,000

So in this way, this whole transaction gets done.

Now you will say can I open only a trading account or a Demat account with any stockbroker.

See technically it is possible but practical it does not make sense and let's understand why

If you open only a Demat account somewhere. And if don't have cash for trade

then what you will do with the Demat account

Suppose you have shares and when you sell them how will you get that money

On the other hand, if you open an only trading account

then you will be able to trade only in the shares i.e. you can do only intraday trading

And you will have to buy and sell that stock on the same day.

Let's understand the transactions also.

Suppose there is a trader who has only opened a trading account.

And let's say he has 50000₹ in his trading account.

And he buys the shares worth 20000.

And he thinks he's purchased shares worth 20000 in the morning.

And there is going to be a good hike in the market.

This is what intraday trading is all about.

He'll only buy or sell the shares when he thinks there is going to be a movement in the share prices

So he's willing to go for the profit If the stock goes upwards or he'll do short selling.

Suppose the trader thinks the stock will go up to 20500 or 21000

On the same day then he will execute the trade worth 20000.

Like I am ready to purchase stocks for 20000.

And let's say the trader is ready to sell the stocks.

And 20 stocks of HDFC get traded.

But try to understand that the trade is on but the delivery is done after 2 days.

So the delivery is not gonna happen because he'll sell the stocks on the same day.

And let's say if he gets a buyer who's ready to buy the stocks for 20,500.

He pays the trader 20,500.

The trader gets the 20,500 and the buyer gets the 20 stocks of HDFC.

Now the trader's not gonna get the stocks.

What he'll get is this difference of 20,000 and 20500 that is a profit of 500₹.

This will be added to his profit of 50,000 so the final amount is now 50,500 in his trading account.

See if anybody wants to keep the trading account personally

then it is technically possible but doesn't practically make sense.

By chance, if you are not getting profit in intra-day.

Maybe you'll have to hold the shares.

And if you wanna hold the shares for just a day.

Then you are gonna need a Demat account to hold the shares.

Let it be an investor or a trader Demat account and trading account are a must.

I hope after watching this video the confusion is over and you understand that

what do both these accounts are meant for? So if you like this video.

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Now I'll see you guys in the next informative video

till then keep learning and keep earning and as always stay happy.