Buy and Sell Shares Dealing

Buying and selling shares, also known as share dealing, is the process of acquiring and disposing of ownership in publicly traded companies. In the context of stock markets like the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) in India, here are the basic steps to buy and sell shares:

Buying Shares (Long Position):

  1. Select a Brokerage: Choose a reputable brokerage firm that offers online trading services. Ensure the brokerage is registered with the relevant regulatory authorities like the Securities and Exchange Board of India (SEBI).

  2. Open an Account: Open a Demat (Dematerialized) account and a trading account with your chosen brokerage. These accounts are necessary for holding and trading shares electronically.

  3. Fund Your Account: Deposit funds into your trading account. This money will be used to purchase shares.

  4. Research and Analysis: Research and analyze the stocks you're interested in buying. Consider factors like the company's financial health, industry trends, and your investment goals.

  5. Place an Order: Use your brokerage's online trading platform to place a buy order. You can choose between a market order (buying at the current market price) or a limit order (buying at a specific price or better).

  6. Confirmation: Once your order is executed, you'll receive a confirmation detailing the number of shares bought, the price paid, and the transaction fees.

  7. Settlement: The purchased shares will be credited to your Demat account. Settlement typically occurs on a T+2 basis, meaning the shares will be available two working days after the trade date.

Selling Shares (Short Position):

  1. Select Shares to Sell: Decide which shares you want to sell from your Demat account. Ensure that you have ownership of these shares.

  2. Place a Sell Order: Use your brokerage's trading platform to place a sell order. Like buying, you can choose between a market order or a limit order.

  3. Confirmation: Once your sell order is executed, you'll receive a confirmation with details of the transaction, including the number of shares sold and the selling price.

  4. Settlement: After the trade, the sold shares will be debited from your Demat account.

  5. Profit or Loss: The difference between the selling price and the purchase price, minus transaction fees and taxes, represents your profit or loss from the trade.

  6. Withdraw Funds: If you wish to withdraw the proceeds from your sale, you can request a fund transfer from your trading account to your linked bank account.

  7. Tax Considerations: Be aware of capital gains taxes, as they may apply to the profit made from selling shares. India has specific tax rules for long-term and short-term capital gains on equity investments.

It's essential to conduct thorough research, have a trading or investment strategy, and manage your risk when buying and selling shares. Additionally, staying informed about market news and trends can help you make informed decisions. If you're new to share dealing, consider seeking advice from financial professionals or mentors to develop your investment skills.