New Registration

Equity FAQ

What are Equities?
Equities are pieces of a company, also known as ``stocks or shares``. When you buy shares of a company, you're basically purchasing an ownership interest in that company. A company's stockholders or shareholders all have equity in the company, or own a fractional portion of the whole company. They buy the shares because they expect to profit when the company profits. Companies issue two basic types of shares: equity and preference shares.

What is bid and ask?
Bid: This represents the highest price a prospective buyer is willing to pay for a security.
Offer (Ask): This represents the lowest price a prospective seller is willing to accept for a security.

What are type of orders and their definition ?
Market Order: An order to buy or sell a specified number of shares at the best available price at the time the order is received on the exchange floor. All orders not bearing a specific price are usually considered "at the market" which could mean paying the ``offer`` when buying or accepting the ``bid`` when selling.
Limit Order: An order for which you request a specific price at which the transaction may be executed.
Stop Buy and Stop Loss Orders: Orders to buy or sell that are placed above or below the current market price, which become active orders when the price of a board lot rises or falls to the specified price. These orders may be placed to execute at the market, at a specified limit or within a specified price range. A stop buy order can be used to protect against losses in a short sale, whereas a stop loss order can be used to protect a paper profit or to limit a possible loss when you already own the shares. Not all stock exchanges will accept these orders. Stop buy and stop loss orders are risky because they may not necessarily fill at the specified price but at the best possible price available at that time.

What is Delivery Based Trading?
Delivery Trading is basically delivery based trading wherein 100 percent Funds / Shares are blocked at the time of placement of the order. i.e. if you want to buy shares you should have the entire amount of funds in your cash limit and if you want to sell shares the same should be available in your demat account. For sell positions, your trading limits will be increased immediately with the sell trade value. This will enable you to take further positions in the market.

Who are eligible to open online trading account?
Any individual, HUF (Hindu Undivided Family), proprietary firm, partnership firm or a corporate can open online trading account with RAINBOW.

What are the documents required to open an account with RAINBOW?
To open an account, following documents are required to be submitted along with filled up client registration form:
For Individuals

  • A. Two passport size photographs (signed across by the client)
  • B. Photocopy of PAN card (photocopy should be clearly visible)
  • C. Proof of Identity a) Passport; b) PAN; c) Voter ID; d) Driving License; e) MAPIN card
  • D. Proof of Address
    • Voter ID
    • Driving License
    • Passport
    • Ration Card
    • Photocopy of Bank Passbook/Bank Statement (attested by Bank)
    • Latest Telephone (landline)/Electricity/Water Bill (Not older than two months)
    • Notarized copy of Lease-License agreement / Sale Deed
    • Identity Card, with address, issued by Central/State Govt. & its departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, Public Financial Institutions,Professional Bodies such as ICAI, ICWAI, Bar Council etc. to their members & Colleges affiliated to Universities.
  • E. Bank Account Proof
    • Photocopy of Cheque / Cancelled Cheque (compulsory in case of MICR)
    • Copy of latest Bank Statement / Passbook, clearly mentioning Bank Account Number, Branch Name & Client Name (not older than six months)
    • Letter from banker certifying account number & the period from which the account is operational
    For HUF
  • 1) All documents & annexures as per ``Individual``
  • 2) Photograph of Karta signed across the photograph
  • 3) Proof of Identity & Address of Karta
  • 4) Photocopy of PAN card of Karta & HUF
  • 5) HUF stamp should be affixed wherever the clients signatures are on the agreement
  • 6) HUF declaration duly stamped & signed by Karta & two concerns clearly mentioning the name, relation & date of birth of the family members
    For Proprietorship Firm
  • 1) All documents & annexures as per "Individual"
  • 2) Latest photograph signed by proprietor
  • 3) Proof of Identity & address of proprietor
  • 4) Photocopy of latest Income Tax return filed
  • 5) Proprietorship firm stamp should be affixed wherever the proprietor signs on the agreement.
  • 6) Declaration of the firm as per "annexure" mentioned in the form.
  • 7) Certification from the bank stating that the account is in the name of the proprietorship firm and the name of the proprietor on the bank letter head

What is the settlement period?
When you place a trade the stock and cash don't change hands until the settlement date which is normally 2 working days from the day you placed the trade (T+2). This means that if you place a trade to buy stock on Monday you must deliver the payment for it by Wednesday when the stock will be delivered to you. Similarly, if you sell stock on Friday then it will be delivered to the buyer on Monday and you will also receive payment for it on Monday. However, you don't have to wait until the settlement date to sell shares that you've bought.