What is the minimum amount I need to start stock trading in India?

Short Answer

A common question that a newbie trader wishes to ask, what is the minimum amount I need to start stock trading in India? A query whose answer we probably look for to initiate our stock investment journey.

Detailed Answer

On surface, this is probably one of the most sought-after answers among novice traders, because its kind of a risk assessment and a capability parameter at the same time. The funny part is, there is no answer to such a minimum threshold.

How much money is required to start Investing in Stock Market?

Well, the reality is that asking that question is sort of like asking what is the minimum amount required to buy vegetables. It looks logical on the surface, but once you actually look at you realise it makes no sense. This is because both of those questions, while they do specify the product, they don't specify the inherent commodity. I shall explain.

You see, the same way you're buying tomatoes, potatoes, or if you're pretentious enough avocadoes, not the entire vegetable market, you're not investing in stock market but in companies within the stock market. The same way each of those groceries would cost you different amounts, so would each of the stocks.

Minimum Amount Required to Buy Stocks

The good part is there are a ton of ways to invest money, or even trade in the markets. You can use instruments like mutual funds, options, futures, and of course the equity shares themselves. In terms of actual money required to start investing, well you simply need to cover the cost price, that is the market price of your investment. This means that when you buy shares, from say National Stock Exchange (NSE), then you have options of buying shares prices as low as Rs. 1, and as high as Rs 75000.

Moreover, how much you invest depends on variety of other factors as well, for example, if you're in your early twenties, the most common financial advice that consultants provide is have a diversified portfolio, but don't over weight the ratio of stocks. So the final investment in stock market in terms of sheer money value is frequently less.

Moreover, suppose you aspire to be an investor and not a trader, then your primary focus would he to find undervalued stocks, which as the name suggests are cheaper, so again less actual investment but over a longer period, you don't actually have to deal with the money parking problem for a while, that is to say.

But suppose you aspire to be a trader getting in all that price action, then what you invest has to be on parameters of your estimated returns, because if it doesn't then you end up just breaking even with brokerage costs.

How much You Need to Start Stock Trading?

An answer to a question like this is often subjective, subject to a whole array of parameters. A good idea is always to define your parameters first, your investment horizons and your investment capability.

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Related FAQs

How much money do I need to start Stock Trading in India?

Its all based on the share you wish to purchase. You can invest one rupee or two rupees in the stock market while there is no maximum cap on your investment.

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Can I do stock trading in India without a broker?

To buy and sell stocks in the Indian stock market, you will need a demat and trading account. A stockbroker is necessary to trade stocks because the broker will provide the trading account through which you will place your trades.

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The operating hours for the Indian stock market is from 9 AM to 4 PM while remaining off on government holidays and weekends.

Is online trading safe in India?

Trading in India is completely safe as all the online brokers are registered by SEBI, which is the regulating body that regulates all the trading activities in the country. Apart from this, there are certain external risks involved in trading like Market Risks, Volatility risks, and over-leveraging, etc. These types of risks can be minimised to some extent by hedging but cannot be eliminated completely.

Can I trade or invest Rs 100 in the share market of India?

You can definitely trade or invest Rs 100 in Indian stock markets. There are no monetary requirements to enter the stock market hence you can buy any share that is trading under Rs 100. Apart from direct stock investing/ trading, there are some indirect ways to own shares over Rs 100. This can be done through Mutual Funds.

What is T+1 Settlement Cycle for Stocks in India?

The Securities Exchange Board Of India (SEBI) has proposed a new 'T+1' settlement cycle, under which shares will be settled/transferred from the sellers' Demat account to the buyers' Demat account in one day or under 24 hours. This will be implemented on an optional basis on the exchanges from January 1, 2022. Exchanges like NSE and BSE will have the liberty to select any script that they want to shift into the new regime.

Can we open demat and trading account without Aadhaar card in India?

Yes, you can open a trading and Demat account without an Aadhaar card but it's not possible to do that in the online method. To open your account without an Aadhaar card, you will have to visit the broker's branch and complete the process there.

Which is the best Trading tips provider in India?

There is not one particular Intraday trading Tips provider. While following a trading tip provider one should ensure that they are SEBI registered and have a decent track record of good Accuracy in their tips provided. The best way to get genuine tips is to follow the tips provided by Full-Service Brokers or Other SEBI Registered Companies who provide trading tips.

What are Basic Necessities to Trade in Stock Market Hassle Free?

Learn the basic necessities to trade in stock market in India. Easy stock trading tips for a hassle free experience as a trader or an investor. All you require is an internet connection, laptop or smartphone, active bank account, demat and trading account and there you do, trading in the stock market is simple as booking the movie tickets online.