The basic difference between demat and trading account is that the demat account
is a stock while trading account is a flow. The trading account is used to execute
buy and sell transactions in the stock markets. The demat account, on the other
hand, holds securities that signify ownership. So a demat account can hold equity
shares, ETFs, mutual funds, government bonds, gold bonds, Fixed Deposits etc. However,
futures and options being contracts, are held in the trading account and not in
the demat account. Similarly intraday trades do not impact the demat account since
the net position at the end of the day is zero in these trades.