Many traders in India are into intraday trading, which means they have to close their trading positions before the stock market closes for the day. In simple words, if a trader has placed a buy order in a day, then he has to place an order to sell the same stock in the same quantity before the market closes, and vice versa.
If a trader fails to square-off his positions before the market closes, then his broker will do it himself. As a position has to be closed on the same day, it is extremely important to find the right kind of broker for intraday trading. So, how can you find the best demat account in India for such kind of trading?
Factors To Consider Before Opening A Demat Account For A Time Frame Of Intraday Trading
1. Low Brokerage
You should select a broker or depository participant (DP) who charges a low brokerage fee. Typically, the volume of trading is quite high in intraday trading. Such traders take positions daily, thereby increasing the volume of securities they deal in.
Hence, you must find a broker, who charges a really low brokerage fee. Besides, a broker should charge a fixed brokerage, irrespective of the size and value of the trade. If you select a broker whose brokerage depends upon the value and size of your trade, then you may have to shell out a lot as brokerage fees. So, be careful of this aspect.
2. High Intraday Margin Exposure
For intraday trading, you should find a broker that provides you with high intraday margin exposure. With a high margin, you will be able to enjoy extra leverage, which will allow you to take much larger positions than your own funds permit.
However, margin trading cuts both ways. If it can help you make huge profits, it can also amplify your losses. While you should select a broker that provides you with a high margin facility, you should use this facility only to the extent you can bear the losses.
3. Efficient Customer Service
In intraday trading, positions have to be squared-off on the same day. Hence, your broker should have excellent customer service.
In case you are stuck somewhere or have a doubt, then your broker’s customer-care team should be able to assist you so that the issue can be resolved quickly and efficiently. If they end up taking a long time to resolve the issue, it may affect your positions badly.
4. Research Reports
Intraday trading requires you to have a deep knowledge of financial markets and various kinds of securities. Hence, you need to read several research reports daily to form an informed opinion about the market.
Therefore, you should select a broker who can provide you with excellent research reports so that you know what exactly is happening in the market. Such reports should have technical analysis and lots of chart patterns that can help you gauge in which direction the market is going.
5. User Interface (UI)
You should select a broker that has a website and mobile app with a user-friendly UI. If a website or an app has a tedious UI, it may make it difficult for you to navigate.
In the worst case, you may find it tough to even execute your transactions. Hence, you need a trading website/app with an accessible and intuitive UI. This is particularly important because positions need to be closed on the same day in intraday trading. Therefore, any glitches in the UI can affect you badly.
Conclusion
Selecting the best demat account in India for intraday trading time frame may not be easy. However, you must choose a demat account considering all the factors explained above. In case, you end up opening a demat account that is not right for you, you may face many issues, which can affect your trading adversely.
