Can I trade without a demat account?

Practically, no. To take delivery of shares you need a demat account, and Indian brokers open a demat and trading account together, so almost every trader has both.

Strictly speaking, intraday trades and futures and options don’t put shares into your demat account. An intraday position is squared off the same day, and F&O contracts are mostly cash-settled or closed before expiry. So the trading account does the work there.

But even if you only plan to trade intraday, you’ll still be asked to open both accounts. And the moment you want to hold a stock overnight, or an option ends up being settled by physical delivery of shares, a demat account becomes necessary.

A hypothetical case: Arjun opens an account only for intraday trading. One day he forgets to exit a position before auto square-off. The shares he bought need somewhere to go. That’s his demat account.

There are a few exceptions for investing. You can buy mutual funds directly from fund houses without a demat account. But for listed shares, ETFs and most bonds on the exchange, you need one.

Our blog post on why you need both accounts breaks this down further. We also walk students through account set-up in the Diploma in Stock Market.