Trading Account
The account with a broker through which buy and sell orders are placed on an exchange.
How it is identified
Test: the account is opened with a trading member of an exchange and is used to route orders, not to hold securities
Unit
qualitative
In depth
Three accounts work together in Indian equity investing and they do different jobs: the bank account holds money, the trading account places orders, and the demat account holds the shares. The trading account is a conduit — nothing of lasting value is stored in it, which is why it is the least of the three to worry about if a broker fails. Since 2022, client funds must be settled back to the bank account periodically rather than parked with the broker indefinitely. Believing that shares are 'held in the trading account' is the most common mental error here.
Worked example
You place a buy order through the trading account; on settlement the shares arrive in the demat account and the money leaves the bank account. Close the trading account and move to another broker and the shares stay exactly where they are, in the demat account.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Trading Account” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.