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Delivery Based Share Trading

Delivery Based Share TradingDelivery based share trading is the best way to become accustomed to using the stock exchange in order to create profit. It involves buying shares and selling them only when the shares are received into the buyers dematerialised account (demat account). A demat account is required by Indian law (issued and regulated by the Securities Exchange Board of India) for Indian investors who wish to trade on the stock and securities market. A demat account is an electronic account which records ownership of any shares owned by the investor. It takes the place of a paper based account that is generally given as a set of certificates to denote ownership of a specific number of shares from a specific company.

Delivery based share trading differs from day trading in that you must have a record of ownership regarding the shares before being able to sell them. This is why it is an excellent starting point for investors who are new to share trading. It gives the buyer a chance to think about when and why they should sell their shares. Although the transfer of ownership of shares is almost instantaneous it gives the buyer a little more room for error. It is also a cheaper option if the buyer uses a demat account because they do not have to pay a stamp duty on the transfer of any shares they purchase (an advantage of the instant electronic methodology of share trading).

Because the delivery based share trading system will only allow you to sell shares you have verified as belonging to you, it can greatly reduce theft, fraud and poor decisions. Because the investment is sent directly to the buyers account, the speed at which you want to sell your shares is not a lot more time consuming than the methods that a regular day trading system works.

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