How do I open a NEPSE online trading account?
If you came here from my previous article on how to open a Demat account and Meroshare account to invest in IPOs, this is going to be your next step.
Like I have already made clear in this article, an IPO is a simple procedure that a company uses to raise money for its business. This happens when the founders of the company do not have enough funds to operate, grow, and scale their business.
Merely applying for IPOs will not make you money. You have to sell the shares that you bought at a higher price to be profitable. And this can be done only via the secondary market of NEPSE.
All the company charts you have seen and the noise you have heard about NEPSE till now happens in the secondary market.
After the company whose IPO you bought is listed on NEPSE, investors are free to trade them. This is why you need to open a broker account to sell your IPO shares and also buy other shares in the future.
In this article, I will talk about opening a broker account to trade your stocks in the secondary market.
What does a broker account do?
In simple words, there are a number of companies trading in NEPSE. In order to make buying and selling easier, NEPSE has given broker licenses to 50 companies. This means that there are 50 stockbroker companies in Nepal that will help you buy and sell shares.
In order to buy and sell shares, you must have an account in a broker company. Remember: one investor can have only one broker account in only one broker company.
How do I buy or sell my shares via a stockbroker?
After you make a broker account, there are two ways you can buy and sell shares.
You can either call your broker company and place the buy or sell order. Or, you can buy and sell shares automatically via the online trading platform they provide.
Trading online is obviously an easier option, but some investors also like to go to the broker office itself to buy and sell shares.
If you have time, you should visit any broker office during trading hours. The rush of excitement and panic among the group of investors that gather in a broker office is interesting to observe. Trust me, no one will stop you from entering the trading room. You should really go see yourself once. Just for fun.
However, you are likely to get intimidated by crowd psychology and place the wrong trades in such groups. This is why I recommend using the online platform or visiting the broker’s office only after you’re sure which shares you will buy and sell for the day.
How to open a broker account?
There are many benefits to making a broker account, so you should definitely open one.
I had my broker account opened at Arun Securities, which has the least number of clients as of August 13, 2020, among other stockbroker companies. It is located in Putalisadak.
Since every broker company operates under the same rules, I do not see much of a difference. Just choose one that is close to your home or office since you might have to visit them occasionally for payment.
This is a list of all the 50 licensed broker companies with their address and contact details.
The entire account opening process was completed in about 10 minutes. They will provide the application form themselves.
This is all that you’ll need:
- Your citizenship card
- A photograph of yourself
- All the necessary details, like temporary and permanent address, family member names, email address, contact details, etc
- Your BOID (Demat number)
- Your bank details
- Your bank cheque to deposit collateral amount
While all other requirements are self-explanatory, I will clarify the collateral amount.
In order to trade online, you will need to load funds to your broker account. This is because the broker company will not execute your trades if it is unsure whether you actually have the money.
For this reason, you will have to write them a check beforehand of an amount you are comfortable to trade with. This amount is called collateral.
In Nepal, you will have to keep 25% of your trading amount as collateral. This means that if you write your broker a cheque of Rs. 25,000, you can place trades of up to Rs. 1,00,000.
Receiving Online Access to Buy and Sell your shares
Within a few days of submitting your application, you will get an email from firstname.lastname@example.org.
The email contains your username (which is a number) and a link to reset your password.
The mail had arrived at me one evening, and I tried resetting my password the other day. However, the link had already expired so I had to call my broker office to send me another password-reset link.
This is why you should keep checking your email and reset your password quickly as it arrives (if you hate extra hassles as I do.)
I then clicked on the link and reset my password.
This is my password:
Haha, I’m kidding. You should not tell your password to anyone.
After the password is set, you will be taken to the dashboard of the online trading portal that looks like this:
You are all set. Explore the dashboard thoroughly and things will make sense. Nothing is as hard as you think.
1 thought on “How do I open a nepse online trading account?: NEPSE Investing Guide: S01E04”
Can you tell me where you got all the knowledge about share market and stuff from?
like tell me exact sources please. I don’t know many things such as
can a already established company issue IPO ? and how is the share price decided?
Say an already established company like NTC has shares and its share value is RS 5000
now if they want to issue an IPO , they have to do it at Rs 100
so now whats the actual value of the shares? can they not issue IPO?