Online vs Offline Trading
If you want to trade in share markets, you should have a good grasp of the fundamentals of share trading. One such aspect is knowing the difference between online and offline trading.
As you cannot trade directly in stock markets, you have to approach a broker/ broking platform. Prior to the advent of the internet, you had no other option, but to make sales/purchase of stocks and securities through a broker, who was either an individual or a firm. For this, you were required to make a physical visit to the broker’s office, where the broker would trade on your behalf. The advent of the internet, however, has transformed the entire gamut of share trading. Now you can trade as per your convenience through online trading accounts.
Here is a look at the differences between Online and Offline Trading:
|Online trading||Offline trading|
|Ease of trading||You can trade according to your wishes, without any assistance from a broker.||All trading is required to be conducted through a broker. In other words, you are completely dependent upon the services of a broker|
|Convenience of trading||You can trade from anywhere and at any time through your internet-enabled device like smartphones, tablets, laptops or PCs.||You are required to physically visit the broker’s office for call and trade, and other trading-related activities.|
|Trading fees||Online trading allows you to make more profits via trading because of fewer brokerage charges and fees.||Many brokers charge exorbitant fees. The high brokerage charges and fees can negatively impact your profits.|
|Platform||You get a single platform to do research and trade in shares and securities.||You need to do independent research before asking the broker to trade.|
|Quality of advice||You can access detailed reports with patterns, trends and price movements to make informed choices regarding stocks and securities.||You need to have implicit trust in the broker. The broker’s word-of-mouth recommendations have to be followed.|
Is Offline Trading Still Possible?
In fact, you can still trade in share markets via the offline route. Offline trading, however, has lost its sheen, and relevance because of the manifold advantages of online trading.
What are the Additional Benefits of Trading via an Online Trading Account?
- Access to real-time information: This key benefit of online trading means that you receive regular updates about the movement of stocks and securities. Many financial companies regularly analyze the various dynamics of the market and provide you with updates on a daily or weekly basis. This ensures that you are aware of the existing and emerging patterns/trends in the market and trade accordingly. In a nutshell, access to real-time information through an online trading account helps you build an effective portfolio.
- Prevention of fraud: Your online trading account is protected by several layers of security. It is virtually impossible to hack your trading account to conduct any unscrupulous activity. Digital transactions also prevent fraudulent activities like impersonation or providing forged documents. Additionally, online trading is closely monitored by the Securities Exchange Board of India (SEBI).
What are Some Online Trading Platforms?
Once you open a trading account, you receive access to different types of online trading platforms:
- Desktop trading software This is a type of trading software, which has to be installed in your PC or laptop. You require an active internet connection to operate the software. Once you install the software, it simulates terminal-based trading. This software has a slew of features to help you make informed decisions about share trading.
- Browser/Web-based platform This platform enables you to trade directly on the stockbroker’s website. You are not required to download anything, and merely require internet connectivity. You can get access to a slew of financial services from web-based platforms. These include purchasing Initial Public Offerings (IPOs), investing in Mutual Funds or bonds, and trading in derivatives. The key highlight of this platform is that it allows you instant execution of orders along with quick settlements.
- Mobile-based trading app Many stockbrokers now provide mobile-based apps for both Android and Apple smartphones. The advantage of these apps is that they allow you to trade while on-the-go. You can do share trading from anywhere, and at any time.
Thus, online trading has made share trading easier, convenient, quick and hassle-free. You should remember to open a trading account only from a trusted financial partner, who can provide a single platform for different investment options. Besides, you must ensure that the financial company offers the best stock and scheme recommendations to enable maximum profit booking.