Q.1. What is stock broking?

ANS. Stock broking is a service that allows individuals or institutions to buy and sell securities (like stocks, bonds, and derivatives) through registered intermediaries called stockbrokers, who operate under the regulations of SEBI in India.

Q.2. Who is a stockbroker?

ANS. A stockbroker is a SEBI-registered intermediary who places buy/sell orders on behalf of clients through stock exchanges like NSE and BSE. They may offer full-service (research + advisory) or discount broking (low-cost execution only).

Q.3. What is a trading account and demat account?

ANS.

• Trading Account: Used to place buy/sell orders in the market.

• Demat Account: Holds your shares in electronic form (like a digital locker).

Both are mandatory for stock market participation in India.

Q.4. How do I open a stock broking account?

ANS. You can open an account online or offline by submitting:

• PAN card

• Aadhaar card (for eKYC)

• Bank proof (cancelled cheque)

• Income proof (for F&O)

• Photographs & signatures

Most brokers offer fully digital onboarding.

Q.5. What are the types of brokers?

ANS.

• Full-Service Brokers (e.g., Mirae Asset Sharekhan, ICICI Direct, HDFC Securities): Advisory, research, relationship manager.

• Discount Brokers (e.g., Zerodha, Upstox): No advisory.

Q.6. What are the charges involved in trading?

ANS.

• Brokerage fees (fixed or % per trade)

• Exchange transaction charges

• SEBI charges

• GST (18%)

• STT (Securities Transaction Tax)

• Stamp duty

Always check the contract note for details.

Q.7. What are intraday and delivery trading?

ANS.

• Intraday: Buy and sell the same stock on the same day.

• Delivery: Stocks held in demat for more than one day.

Charges and taxes differ for both.

Q.8. What is margin trading?

ANS. Margin trading allows you to buy securities by borrowing funds from the broker. It increases your buying power but also your risk.

Q.9. What risks do traders face?

ANS.

• Market volatility

• Leverage/margin losses

• Technical issues (platform downtime)

• Slippage and order execution delays

• Behavioral biases and overtrading

Q.10. What services do brokers offer to investors?

ANS.

• Demat and trading account

• Equity and ETF investing

• IPO applications

• Research reports and recommendations

• Portfolio tracking tools

Q.11. How do I evaluate a stock broker for long-term investing?

ANS.

• Trust & reputation

• Quality of research and advisory

• User interface and mobile app

• Account maintenance charges (AMC)

• Transparent fees

• Customer support

Q.12. Is my money safe with a broker?

ANS. Your funds and securities are held in your name with a SEBI-regulated custodian. However:

• Choose SEBI-registered brokers only.

• Be cautious of fraud or unauthorized trades.

• Check broker ratings on NSE/BSE or SEBI site.

Q.13. How do I apply for an IPO through a broker?

ANS. You can apply via:

• Broker’s platform using UPI

• Net banking using ASBA

Shares will be credited to your demat if allotted.

Q.14. Can I invest in mutual funds through my broker?

ANS. Yes. Most brokers offer mutual fund platforms (regular or direct). You can invest, redeem, and track mutual funds alongside your equity investments.

Q.15. Are there any tax implications?

ANS. Yes:

• Equity STCG (≤ 1 year): 15%

• Equity LTCG (> 1 year): 10% (above ₹1 lakh/year)

• Intraday gains: Taxed as speculative income (slab rate)

• F&O profits: Taxed as business income

Q.16. What is SEBI’s role?

ANS. SEBI (Securities and Exchange Board of India) is the regulator of the securities markets. It registers and monitors brokers, protects investor interests, and enforces compliance.

Q.17. How can I file a complaint against a broker?

ANS. You can raise a complaint on:

• SEBI SCORES platform (https://scores.gov.in)

• Exchange grievance redressal cell (NSE/BSE)

• Ensure you keep contract notes and communication records.

Q.18. What happens if a broker defaults or shuts down?

ANS.

• Your securities are safe in your demat account.

• Funds may be recoverable through SEBI/Exchange mechanism.

• Always keep backups of your statements and records.