How to Close a Trading Account?

A trading account is an account that is basically for investment and trade. Any account used for investment can be called a trading account. Generally, a trader's primary account can be depicted as a trading account. They make online buying and selling of stocks easier and more peaceful. The assets secured in trading accounts are separated from others which can be a part of a long-term buy and hold strategy.

A trading account holds securities, cash, and many other investment instruments as other brokerage accounts. However, a trading account is differentiated from other investment accounts by the level of its activity, the purpose of that activity, and also the risk involved in it. The activity in a trading account generally involves day trading.

The Financial Industry Regulatory Authority (FINRA) calls the day trade the purchase and sale of a security in between the same day from a margin account.

Steps to Close a Trading Account

Here the a required steps to close a trading account are listed:

• First, you have to notify the broker or firm with whom you opened your trading account that you want to close your trading account.
  
• Then you will be provided an account closing form by that broker or firm. You must have to check its details properly before filling it.
  
• After doing it you would be required to submit that account closure form in your nearby branch of that firm.
  
• We know our trading account and Demat account deal with securities. So, one should clear the board before moving toward the closing procedure.

Things to Keep in Mind Before Closing a Trading Account

Here some most important points are listed that one should keep in mind before thinking about closing their trading account:

• If you have a Demat account connected with your trading account then you must ensure that it's empty and it's not. You can transfer your shares to another Demat account, can sell them, and can even dematerialize them as physical certificates.
• Your connected Demat account should not contain any negative balance, in such case your request gets unapproved.
• There are no charges implemented on the closing of Demat or trading account.

Reasons Why People Close Trading Accounts?

The trading account can be referred to as a gold mine having various opportunities to trade in various financial markets. But still, in some circumstances, a person has to close their trading account. Here some of the common reasons of closing a trading account are listed below:

• The most known reason for closing a trading account is the declutter caused in trading due to it. When people manage various accounts like equities, derivatives, and much more, at a point when they become experts they desire to close a few of them.
• Another most common reason for closing the trading account is when the trader does not get the assumed amount of profit then they start looking to end it. And because of it, they prefer to close their trading account.
• Another reason for closing a trading account can be the change in living standards of the trader and due to which they did not get enough time to perform trading with their trading account.
• Now-a-days a high amount of competition among brokers is seen. Brokers come up with competitive and attractive offers. Also there have been many cases of fraudulent brokers. Hence investors and traders consider switching their accounts from one broker to another.
  
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What is a Trading Account?

A trading account can be any account that holds cash, any investments, an account containing securities, and many other kinds of holdings. Each trading account has a unique trading ID which is required to perform online trading in the stock market.

Features of Trading Account

Here some of the features of a trading account are given. To let the users know whether they should go for the trading account or not as per their needs :

• A trading account is basically used to place, buy or sell orders or trade on the securities.
• A trading account is the only way to do consolidated trading in the securities market.
• A trading account is like a de facto method to get access to the stock market.
• The trading account makes the online trading process very easy and peaceful for the traders.
• The general purpose of a trading account is to buy and sell stocks, bonds, and other securities and transform them into profit.

How to Open a Trading Account?

Steps to open a trading account are given below to guide you in that process :

Select Stock Broker or Firm

In the first step of opening a trading account, you have to select a suitable broker for yourself. You must have to keep in mind the value of time because even a seconds difference changes too much in the stock market. So, choose the right one with caution. And it would take your orders and supply them to you on time.

Compare Brokerage Rates and Services Provided

Every broker charges a certain amount of money, which they call brokerage fees, for processing your orders. Different brokers charge different fees. Some may charge less, some can charge high.

Get in Touch with Selected Brokers for Trading Account

Some brokers charge less fee, but one should not get allured with it, because sometimes for better broker suggestions you have to pay more than average. After that process, you have to catch up with the broker or brokerage firm to know further about the best trading account in India. Even some firms send their representative to clients' doorsteps if they want.

Fill Account Opening and KYC Forms and Submit them with Proof of Identity and Address

After that process, the client has to fill up the form along with the proofs required such as proof of identity and residential identities too.

Application Verification Process

After submitting the required documents the verification process comes to ensure that the details you have provided are accurate or not. For this, they use person-in-check mode or by verification through the phone.

Receive Trading Account Details

After this, you will be given your trading account details and after this, you would be able to perform trading in the online stock market.

Place Buy or Sell Orders

When you receive your trading account till then you would be able to start trading, placing orders, and buying or selling Securities.

Wrapping Up

A trading account is an account that keeps a summarised format of various past and present trades performed through it and with whom they took place.

• Features of a trading account - its only way to perform online trading, makes online trade safe and peaceful.
• Steps to open a trading account - select broker or firm, compare brokerage rates, get in touch with a broker, fill out the KYC form and documents required, application verification process, get account details and perform online trading.
• Why do people close trading accounts - people close trading accounts due to various reasons, when they become unable to handle one or more accounts when they face losses when their change in lifestyle does not give them enough time to trade, and more.
• Steps to close a trading account - inform the broker firm, fill closure form, and deposit in a nearby branch.
• Things to keep in mind while closing a trading account - You should there would be no shares left in the Demat account with it, there would be no negative balance, if there are any shares left you should transform them into physical form, or sell them or transfer them.