Corporate entities collaborate to ensure transactions in the market are smooth. From logging into a trading terminal to having shares credited to your DEMAT account, the collaborative effort of market intermediaries guarantees a flawless transaction.
These entities remain out of sight, yet in compliance with SEBI regulations. They ensure a streamlined experience when trading on the share market. They are called Financial Intermediaries or Market Intermediaries.
These interdependent financial intermediaries create a system in which financial markets can operate. We will now examine some of the major players in this ecosystem and their respective roles.
- The Stock Broker
The stockbroker is an important figure in the financial world. They are responsible for providing advice and buying and selling stocks on behalf of their clients. They analyse investments, make financial recommendations and provide counsel to investors.
A stockbroker is a crucial financial intermediary. They are corporate entities that hold a stockbroking license granted by SEBI after thorough analysis of their credentials and due diligence. It is also imperative that they abide by all the regulations relevant to them as decreed by SEBI.
A stockbroker provides you with direct access to transact in the share markets. To initiate an investment, you must open an account with one of many registered brokers in India. Before settling on a particular broker, individuals usually apply personal preferences and compare based on popular questions like –
- How simple is the platform?
- How efficient is their support system?
- How easily can I access reports like Profit & Loss reports, Tradebook records, and Tax P&L documents with this access?
- Broker’s net worth as it should be profitable and have a positive record of profits and losses.
- What are the broker’s initiatives in educating the users? Just like Stoxbox has these series of articles which provide an in-depth knowledge about investments.
Once you’ve chosen your broker and opened a trading and DEMAT account, you can begin your journey into the share market. With the account setup complete, you have multiple options for interacting with your broker.
You can contact your broker, providing your client code, to place an order for your transaction. The dealer on the other end will execute it and give confirmation of the status while you are still on the call.
Do-it-yourself or DIY is a frequently used mode of trading in the markets. Your broker provides you with a Trading Terminal to access the market. Here, after logging in, you will be able to view live prices from the market as well as place orders yourself.
Experienced users can gain access to the market through APIs. Certain brokers provide these APIs for a set price.
Brokers offer key services, such as:
- Access to markets which enable us to transact.
- Margins for trading. We will further delve into the topic later
- Issuing contract notes for the transactions- To give you context, a contract note is a written confirmation of all transactions on an – everyday basis.
- Streamline the flow of money between your trading and bank accounts.
- Call and trade support, customer service for answering queries and informing about the market.
You can avail call and trade services, along with futures and options with Stoxbox.
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