Having a demat account and trading account are one of the primary requirements for trading and investing in the Indian stock market. With the growing popularity of intraday trading, there are many questions in the minds of traders in the stock market. The most common question or doubt is regarding the requirement of demat account for intraday trading. In this article, we will resolve all your doubts and understand whether the trading account is enough for intraday trading or it is compulsory to open a demat account.

Firstly, let us understand the purpose of demat and trading account.

Purpose of demat and trading account

The demat account functions just like a bank account. Just like the bank account holds your money, a demat account holds your shares or securities. On the other hand, the trading account does not hold the shares or securities in the account, it enables you to trade in them. The nature of transactions in the trading account is over a period of time i.e. 1 month, 3 months, 1 year, etc. On the other hand, nature of transactions in the demat account is at a point in time i.e. measured on 31st of March of each financial year.

After understanding the basic purpose and functions of both the accounts, let us now understand whether the demat account is necessary for intraday trading.

Demat Account Is Necessary For Intraday Trading?

When you want to hold shares or securities on a delivery basis, demat account is compulsory. However, if you intend to trade only in futures and options, there is no requirement for demat account. Trading account is enough because futures and options are settled in cash and involves no delivery of shares for the demat account to hold. But, when you want to trade in equities, having a demat account is compulsory. As per the SEBI guidelines, when you trade in the equities, it is mandatory to have a demat account along with a trading account.

If you wish to open a demat account, you can contact a reputed broker like Kotak Securities. All you need to do is submit the necessary documents and you will have your demat account within no time.

Sponsored post by Kotak Securities