How to Buy Shares Online?

How to Buy Shares Online?

In today's digital age, buying shares online has become increasingly popular as a way to invest in the stock market. With just a few clicks, you can become a shareholder in a company and benefit from its growth and success. 

This article provides a comprehensive guide on how to buy shares online in the share market , covering everything from understanding shares to practical steps and tips for successful investing.

What are Shares?

Shares, usually referred to as stocks or equities, signify ownership in an organisation. You acquire ownership of the firm when you purchase shares, giving you a claim to its assets and profits. The market capitalization of the company is based on the total number of shares, which are normally divided into units of equal worth.

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Table of Content

  1. What are Shares?
  2. Why Buy Shares?
  3. How to Buy Shares Online 
  4. Tips for Buying Shares Online 
  5. Conclusion

Why Buy Shares?

Buying shares offers several advantages for investors: 

  1. Long-Term Wealth Creation: Investing in shares has the potential to generate long-term wealth. Over time, as companies grow and expand their operations, their stock prices may increase significantly, leading to substantial capital gains.
  2. Inflation Hedge: Shares can serve as a hedge against inflation. Inflation erodes the purchasing power of money over time, but investing in shares allows you to potentially outpace inflation and protect the value of your wealth.
  3. Access to Professional Management: When you buy shares, you gain access to professional management teams who are responsible for running the company. By investing in well-managed companies, you can leverage the expertise of these professionals and benefit from their strategic decisions.
  4. Liquidity: Shares are highly liquid investments, meaning they can be bought or sold easily. In the stock market, there is a continuous flow of buyers and sellers, ensuring that you can convert your shares into cash whenever needed.
  5. Portfolio Growth: Including shares in your investment portfolio can enhance its growth potential. Shares have historically delivered higher returns compared to other asset classes over the long term, such as bonds or cash.
  6. Global Exposure: Investing in shares provides an opportunity to gain exposure to global markets. Many companies listed on stock exchanges operate internationally, allowing you to diversify your portfolio geographically and benefit from the growth of international economies.

By learning how to buy shares online, investors can take advantage of these benefits to increase their wealth, create passive income, and partake in the success of businesses they support. To make wise choices and navigate the volatile stock market, it is essential to do extensive research, diversify investments, and seek professional counsel.

How to Buy Shares Online 

  1. Get a PAN Card: To buy shares online in India, you need a Permanent Account Number (PAN) card issued by the Income Tax Department.It functions as a special identification number for taxation.
  2. Find a SEBI-Registered Broker: Choose a Stock Exchange Board of India (SEBI)-registered broker, which will act as an intermediary between you and the stock market. Ensure the broker offers online trading services and has a user-friendly platform.
  3. Open a Demat and Trading Account: To hold shares in electronic format, you must open a Demat (Dematerialized) account. This account will store your claims securely. Alongside, open a Trading account to place buy and sell orders. Most brokers offer both accounts as a package.
  4. Fund Your Trading Account: Transfer money to your trading account so you have enough money to purchase shares. You can link your bank account to your trading account for seamless transactions.
  5. Choose the Shares You Want to Buy: Conduct thorough research and analysis to identify the shares you wish to purchase. Consider the company's financial performance, industry trends, and prospects.
  6. Place a Buy Order: Using your broker's online trading platform, enter the details of the shares you want to buy, including the company's name, quantity, and price. Choose either a market order (buy at the prevailing market price) or a limit order (buy at a specific price).
  7. Monitor Your Investment: Keep track of your shares' performance using the trading platform or other financial tools. Stay informed about company news, earnings reports, and market trends that may impact your investment.

Tips for Buying Shares Online 

  1. Do Your Research Before You Buy: Thoroughly analyse the company's financial statements, industry position, competitive advantage, and management team. Consider consulting financial experts or utilising online resources for research.
  2. Start Small and Gradually Increase Your Investment: As a beginner, starting with a smaller investment and gradually increasing it as you gain more experience and confidence in the market is wise.
  3. Diversify Your Portfolio: To mitigate risk, spread your investments across different companies, sectors, and asset classes. Diversification helps protect your portfolio from fluctuations in individual stocks.
  4. Be Patient and Don't Panic Sell: Investing in shares is a long-term commitment. Avoid making impulsive decisions based on short-term market fluctuations. Stick to your investment strategy and have patience during market downturns.

Conclusion

Individuals in India can trade shares online and potentially profit from the stock market through capital growth and dividend income. Get some essential documents such as Aadhaar card, PAN card, look for a broker registered with SEBI, open a Demat and Trading account, and do extensive research before buying shares.To succeed over the long term, start small, diversify your holdings, and exercise patience. Use the blinkX trading app with a simple interface, a wealth of features, real-time market data, research tools, and an easy order placement process. blinkX is a dependable partner for your online share trading endeavours and is available for iOS and Android smartphones. Utilise the blinkX trading app to begin your investment journey and capitalise on the stock market's possibilities.

How to Buy Shares Online FAQs

The minimum investment required depends on the price per share and the brokerage fees. You can start with as little as a few thousand rupees, but it's advisable to have a sufficient amount to diversify your portfolio effectively.

Buying shares online requires a SEBI-registered broker to facilitate the transaction and provide access to the stock market.

Consider the company's financial health, growth prospects, industry trends, and investment goals. Research extensively and seek advice from professionals if needed.

Share investing involves market volatility, company-specific risks, and economic uncertainties. Awareness of the risks and making informed investment decisions is essential.

You can sell your shares online through the same broker's trading platform. Place a sell order, specifying the quantity and price at which you want to sell.