The following steps are involved in the screen based trading for buyi…

The following steps are involved in the screen based trading for buying and selling of securities. Arrange them in correct sequence:

(A) The investor opens a demat account with a depository participant for holding and transferring securities in demat form.

(B) The broker goes online and connects with the main stock exchange and matches the share and best price available.

(D) The investor signs a broker client agreement and client registration form.

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → (D), (A), (C), (B)

(D) The investor signs a broker client agreement and client registration form. — First. Only a registered broker can trade on the exchange, so the investor must first engage one. The broker then opens a trading account in his name.
(A) The investor opens a demat account with a depository participant for holding and transferring securities in demat form. — Second. Shares are now held only in electronic form, so the investor needs a demat account before he can receive or deliver any.
(C) The investor places an order with the broker to buy or sell shares. — Third. With both accounts ready, he gives the broker clear instructions on the number of shares and the price.
(B) The broker goes online and connects with the main stock exchange and matches the share and best price available. — Last. The broker carries out the order on the exchange’s screen only after receiving it.

Note: Although the chapter ‘Financial Markets’ was dropped from the NCERT textbooks during rationalisation, it has stayed in the NTA syllabus every year since 2022, except for 2025, and it is part of the syllabus again from 2026. This question is therefore based on the pre-rationalised NCERT, an extract from which is given below.

NCERT (Pre-rationalised Edition): “The following steps are involved in the screen-based trading for buying and selling of securities:
1. If an investor wishes to buy or sell any security he has to first approach a registered broker or sub-broker and enter into an agreement with him. The investor has to sign a broker-client agreement and a client registration form before placing an order to buy or sell securities. …”

“2. The investor has to open a ‘demat’ account or ‘beneficial owner’ (BO) account with a depository participant (DP) for holding and transferring securities in the demat form. …”

“3. The investor then places an order with the broker to buy or sell shares. Clear instructions have to be given about the number of shares and the price at which the shares should be bought or sold. …”

“4. The broker then will go on-line and connect to the main stock exchange and match the share and best price available.”