Nowadays, investing in the stock market seems surreal to many people as it’s becoming a major income source. As stock trading is the selling and buying of stocks or shares in companies, you need a trading account for it. The trading account serves as a platform for selling and purchasing stocks and has multiple types.
If you are starting with your stock trading journey and don’t know much about stock trading accounts, we got you covered. Let’s discuss the online types of trading accounts!
Forex Trading Account
A Forex exchange or trading account is typically used to deposit and trade different foreign currencies. The purpose behind these currency deposits is the speculation of movement in foreign currencies. Generally, in a Forex account, you deposit money in your local currency and then purchase and sell it in currency pairs. The best part about this account is that its opening procedure is very simple; all you need is a good broker.
Commodity Trading Account
The commodity trading account is next on the list of online types of trading accounts. This account usually deals with selling and purchasing different commodities or raw materials like wheat, rice, agricultural material, etc. It’s connected to a Demat account, and the deals are made electronically. Through this account, you trade goods instead of stocks.
Equity Trading Account
An equity trading account is needed when you want to sell and purchase stocks and equities and deal with other options. You can’t make direct use of the equity trading account for the delivery of stocks, and for this purpose, you must have a Demat account.
However, if you are going with other options and futures, then a simple equity trading account is sufficient. It’s because you don’t need to make a delivery while dealing with other options.
Typically, to trade in stock markets, you need three different online types of trading accounts. These are;
- A trading account
- A Demat account
- And a bank account
The process of using a 3-in-1 account isn’t very difficult, and you first need to deposit money from your bank account to the trading account. After that, you can make investments in the stock market through the trading account, and the bought shares will be held in the Demat account. Some brokerages offer a 3-in-1 trading account that has an integrated bank, Demet, and trading account. Hence, the overall trading procedure becomes easier.
Discount and Full-Service Trading Account
Last but not least online types of trading accounts are discount and full services trading accounts. With a discount account, you can only deal with vanilla trading options, which means buying and selling vanilla products.
These include extracts, vanilla beans, sugar, etc. Additionally, the discount account doesn’t offer all the features or any value-added services. In contrast, a full-service trading account offers you everything from stock suggestions to research reports and other trading facilities.
Having full knowledge about all the online types of trading accounts is important to kickstart your journey as a stock trader. You can select the type of account you need depending on the nature and type of trade you are doing! Make sure to do thorough research before making a move to maximize your chances of success.
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