What are the Advantages of Online Trading?

No discussion on online trading is complete without a discussion of the advantages of online trading at length. You must by now be familiar with some of the basic online trading advantages like transparency, simplicity, convenience, control, etc. Here we look at the online trading benefits in greater detail and the benefits of online trading from your laptop or your mobile app.

One of the big online trading advantages is the access to top-class analysis and process at the click of a button. It is these benefits of online trading that sets it apart with an edge over offline trading. Here is a quick dekko at the online trading advantages for traders and also for investors.

Advantages of Online Trading?

You are by now familiar that trading in equities is all about buying and selling equities in the stock market. Your online trading account is a bit more than just equities because you can also buy and sell equities, futures, options, indices, ETFs, gold ETFs, currencies, etc. First things first. Online trading is the execution of buying and selling orders over the internet using your PC or your laptop.

You can also execute these orders by downloading a simple mobile-friendly trading app on your smart phones. Normally most brokers support Android and Apple. Before embarking on online trading, you first require an online trading account for which you must go through the basic KYC or Know Your Client process. Only after that, you can place buy and sell orders on the internet. Let us look at some of the advantages of online trading in the Indian context.

  1. Online trading gives more control over the trade to the customer with the entire process from conception to execution to monitoring under your control and watch. You can place the order online, monitor the order online, and close out the order also just online with the client of a button. Profits and losses are automatically adjusted to your trading account daily.

  2. Trading ideas and trading research can be disseminated by the broker through your online trading account itself so that you do not have to depend on multiple sources for your research and execution. With everything in your trading platform, you don’t fall prey to WhatsApp forwards and hot tips. You can get quality guidance from your broker online.

  3. The online trading definition is all about transparency. You define the price you want to trade and you can see the execution in front of your own eyes. If you are unhappy, you can even cancel or modify the order. Also, your Demat account and your online portfolio will get updated automatically, so absolutely no worries.

  4. Online equity trading gives you the added advantage of a lower cost of execution. Most brokers offer you a lower brokerage cost for online trading as they do not have to invest in an offline presence and that benefit is passed on to the customer. That means; you get added control over your trades at a much lower cost. Since the brokerage costs are lower, the associated statutory charges also become lower. Also, lack of transparency is a big hidden cost in offline trading and that is obviated in online trading.

  5. If you were, to sum up, all these points into a single monolithic argument, then online trading becomes a seamless platform for the customer. For example, the trader can read the research, make a decision by comparing stocks with screeners and directly execute the trade with a few clicks. In addition, they can monitor the trades, take corrective action on their own, modify the trades, cancel the trades, and almost everything that a dealer does, the individual can manage on their own.

Risk Involved in Online Trading

Risks in online trading are more on the security front for which you can take precautions. Of course, online is still a technology so you may face connectivity issues. However, there are backup plans like the call-n-trade facility offered by most brokers today. You can make the best of all that. Also, the risk of technology can be obviated if you take basic care about using secure connections, avoid public platforms, avoid public wi-fi networks, regularly change your password, etc.

Basics About Online Trading

Online trading is a seamless process of operating your trading account on the internet. It can either be done online with your PC or laptop or you can even download the online trading app from the store and use it on your mobile. The mobile app is normally configured to work on the mobile screen. Online trading is where you the customer have total control over the entire trading process from end to end.

Frequently Asked Questions Expand All

Being profitable or not is about trading skills and not about trading online or offline. Online trading is more about convenience, transparency and control over the trading process. Of course, the costs are lower in online trading so that indirectly boosts your profit. This is more so if you are an intraday trader or a short term trader who keeps churning money and capital rapidly.

That would depend on your broker offerings. But some of the online value added services are online portfolio, online alerts, ability to set price and time alerts, ability to do seamless call to action by directly executing orders from news flows, portfolio repair services etc. Some online portals also offer additional service in the form of use of artificial intelligence to improve your online trading decision. The choice is entirely yours.