You have always known people who made good money from your locality in the stock markets.

Like them, you too had wanted to dabble in the stock markets. But were not sure about how to go about it.

Not anymore. Because your task has been made easier by the network of brokers, sub-brokers and their affiliates that have proliferated throughout India.

Most prominent brokerage houses now even help you buy or sell shares online.

You just need to have a reliable internet connection; download or install their trading software and you are all set to trade in the stock markets.

Of course, for those who prefer people-to-people interface or like to place their buy/sell orders on phone can get registered with offline brokers.

Competition in the brokerage business in the last decade has become so intense that most brokerage houses offer their customers online as well as offline brokerage services.

Online brokers

Prominent brokerage houses like ICICI Securities, HDFC Securities, India Infoline, Motilal Oswal, IL&FS Investsmart and SSKI offer online brokerage services.

These are just a few brokerage houses that offer online trading in India. You can always talk to your friend or elders or anybody who dabbles in stocks to find more about such online brokerages in India.

What you need to do is logon to their websites and fill in an online account opening form.

What these websites need to register you as a client is your name, address, personal details, telephone numbers and contact details.

•  Want an online stock broker?

Once you are registered with them they will send their customer service executive to your house or at a place of your convenience to complete other account opening formalities that cannot be done online.

One such thing would be your signature that you will have to make on the broker-client agreement. Make sure that your pore through the entire agreement before putting your signature anywhere.

Apart from this you will also have to open a demat account with the broker, who also acts as a depository participant.

These are modern times and every aspect of your online trading is made paperless. You can buy or sell shares at the click of the mouse.

If you buy shares they will get credited to your demat account. On selling, the quantity sold will be debited from your demat account.

Make sure that you have enough money in your bank account (which is also linked to your trading account) while buying shares and enough shares in your demat account while selling shares. Otherwise the online orders will not go through.

One advantage of opening an online trading account with a brokerage house owned by a bank is the seamless convenience that it offers to its customers in terms of transfer of shares and transfer of money in and out of your trading account.

Ask the company executive to explain all the clauses in the agreement as well as a demo on how to trade online to you in detail.

Offline brokers

They either operate through their own branch network or through a franchisee of sub-brokers.

While it is not possible for brokerage houses to open a branch in the tiniest of towns in India they can always appoint their franchisees in these towns.

• How expensive is an online stock broker? 

The stock market regulator, the Securities and Exchange Board of India, SEBI, has become very stringent with brokers and sub-brokers. Action is taken immediately against those violating the prudential norms laid down by the regulator.

This is an ongoing exercise to protect the ever-increasing tribe of Indian investors who avail of the services of this broker, sub-broker chain.

Brokers who register clients for offline brokerage services prefer clients referred to them by their existing clientele. It is a common practice encouraged by brokers.

Suppose your friend is trading with brokerage house X for the past two years. He has developed a good relationship with her/him over the period.

Now when you want to open an account with this broker and if your friend refers your name, the broker won't spend extra time checking your credentials.

Of course, he will make you sign all those documents that are a part of 'Know Your Client' (KYC) programme started by the market regulator.

Once the referral is done you will have to pay money for opening and maintaining a client account and a demat account. Once every thing falls into place you get a client code from your broker and the next time you want to buy or sell shares you will have to quote this client code.

• Stock market terms you must know

Every client has a unique client code number. Your KYC details (with the online and offline broker) are then sent to the stock exchanges of which your broker is a member. This helps the exchange keep a track of your trades.

In India most brokers are members of either the National Stock Exchange (NSE), Bombay Stock Exchange (BSE) or in many cases both the exchanges.

Though the latter is a 132-year old stock exchange, it is the former that has a pan-India presence.

While the BSE has registered membership of 874 brokers spread across 380 Indian cities, NSE has 933 registered members across 1490 cities and towns in India.