How to buy Shares using DEMAT ACCOUNT?

I have recently been getting a lot of visitors searching for How to buy shares using your Demat account? or How to place order using your Dmat account? and so on.

First you must understand that Demat Account is merely an account which 'keeps' your shares. Just as a savings account in a Bank keeps your money. Now if you want to buy shares "using" your Demat account you need to either have an Online Trading Account or find some Broker. You can either directly place an order with the Online Trading account with a few clicks, or you can call/tell your Broker to buy the shares for you.

There are two things you can do with the shares or stocks or equities that you buy. You can either sell them on the same day itself. Such buying and selling of shares on the same days is called intraday trading. Or you can choose to 'keep' those shares in your demat account (to be sold at a later date at your discretion), an action usually referred to as "take delivery" of those shares. Such a trade would be called "Delivery". The brokerage charged for delivery trades is typically more than that charged for Intraday trades. Read my post on comparison of brokerage charges in India to get an idea about how much brokerage is charged for Intraday and Delivery by leading brokerage houses in India.

T+3 rule

Remember that once you place a delivery order for shares (or stocks or equities) with a broker or on your online trading account, they are not immediately deposited in your demat account. They will only be deposited on the 3rd business day. T in T+3 refers to trade or the day on which trade has taken place.

Can shares bought for Delivery be sold on the next day itself, before having to wait for 3rd day on which they are deposited in your Demat account? Yes! this type of trade is called "Obligation". I'll write more about it later.

Nov 24, 2008


Anonymous August 5, 2009 at 3:49 PM  

it was really helpful for me

Anonymous May 6, 2010 at 3:35 PM  

It is really simple and clear.. easy to understand..

Anonymous July 20, 2010 at 11:46 AM  

Thank u sir.. ur blog has been very useful.. I am new to the trading... and recently applied for sbi demat accnt... If any suggestions for me using sbicepsec site please mail it to me at

Penny Stocks September 14, 2010 at 10:52 AM  

I really like this blog post, it has some great info. Thank you and keep up good work.

praveen November 8, 2010 at 7:08 PM  

It is very much helpful, I am very interested in shares n trying to understand the little things through your blog.

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