What is Online Share Trading?

Today, online trading becomes more than the norm rather than the exception. Online trading or online share trading is the execution of capital market orders on the internet. You can either place, execute and monitor orders in online share trading using the PC or laptop or even download the app onto your mobile.

Here let us look at online share trading meaning and also how online share trading India has panned out in the recent past. Online stock trading has become the norm today with more than 20% of the total trading in the market and more than 50% of the retail trades being accounted for by online stock trading platforms. Here is a quick at how share trading online works, the rewards of share trading online, and the risks and nuances of share trading online.

Online Share Trading?

Online trading or online share trading entails executing orders on the internet. Using the online share trading mechanism, you can buy shares, sell shares, modify orders, etc. It is not just equities that are covered by online trading. Once you open your online share trading account, you can trade equities, ETFs, futures, options, currency futures, and currency options, all under one single online trading platform. The most important thing about online trading is not the technology or the speed that online share trading offers. It is that online trading puts the customer at the center of the entire piece and that is what makes online share trading so unique. The customer is the nucleus or the center of the entire online trading activity. That is where the real importance of online trading comes in. Here we tell you how the internet trading account that is your gateway to online share trading empowers you. Here are some highlights of online share trading.

  1. Online trading is simple, sweet, and elegant. Once your account is activated, you just need your online trading user name, password, and second-level authentication to start trading. You can access the online trading account on your PC, laptop, smartphone, and notepad or even download the app on your mobile.

  2. Remember, online trading is all about gaining greater control over your online trading account. You are the one who places the order and takes accountability for its execution. In online trading, you don’t depend on a trader or a dealer to execute orders on your behalf. There are several problems in physical or offline trading. You may not be able to get across to the dealer or you would realize that you are not getting the best price. Online trading or online share trading obviates all that. You have total and absolute control over the entire process from the end from placing the order to executing and modifying and monitoring the order.

  3. Typically, brokers offer you lower brokerage on internet trading since most of the tasks are done by you. The broker does not have to maintain front office infrastructure and just a back-end call-n-trade facility is good enough for online traders. These cost savings are normally passed on to you.

  4. Online trading or online share trading is a kind of an anywhere / anytime kind of trading model. It really would not matter whether you are in any part of India or even some part of the world. You can still access the trading account over the net from anywhere and execute trades. Most online trading platforms also allow you to place orders at night and the actual execution happens the next day.

  5. Online trading or share trading online is largely menu-driven and at the click of a button. You can place the order at the best price or you can even place a limit order or market order depending on what is best suited to the condition. If the order is not yet executed, you are at liberty to modify the price and quantity and you can see the updated status of the same in your order book and trade book. You can also cancel the order if you change your mind, assuming that the order is not yet executed because once it is executed the order can only be revised using the online trading account.

  6. Interestingly, although online trading or share trading online is largely impersonal and hands-off, it is very transparent. Here is why share trading online is transparent. You see the bids and ask prices right in front of you. You can see the order is executed on the screen in front of you and the best prices are in front of you. You are at liberty to yourself open the Order book and check your pending orders. You can subsequently verify the trades in your trade book and take a look at orders and the details of the execution. In short, this online trading or online share trading is an online and transparent methodology of executing trades in the capital markets.

  7. You don’t have to keep snooping around for the best research ideas. It is right there in front of you and you can take a pick of the best ideas and get the same executed. Online trading is not just about execution but also about research ideas and screeners. All these puts together empower the online share trading platform. Effectively, these are all tools to help you perform better and more seamlessly. In share trading online, these online tools go a long way in giving you a better trading experience.

  8. With online trading, your call to action can be newsy. For example, you read a news item and want to take a trade, and then what do you do? Your online trading account will allow you to click on the news item and simply execute the trade in one single click. That is a lot of power and flexibility at your fingertips and that is only possible with online share trading.

  9. Online trading is online in the real sense of the term. No worrying about cheques, no DIS slips, and no contract notes. Everything is one seamless cycle from an online trading account to your bank account to your Demat account. You fund your trading account online with your bank transfer and then execute the order. It is that simple, The shares will automatically go into your Demat account on T+2 days if they are fully paid for. When you sell shares, these shares are automatically debited to your Demat account and on the T+2 day, the funds are credited to your bank account.

That is how you can make the best of online trading platforms and facilities.

How to Start Online Trading?

You must start by opening a trading account and getting online trading activated. Once your KYC is done, it is much simpler online these days, you can start trading in a jiffy. You must ideally familiarize yourself with the process flow before you get down to the real trading job.

Online vs Offline Trading?

Online trading is about trading on the internet or with a trading app. Offline trading entails calling up the dealer or the trader and placing orders on the phone. Online trading is relatively more transparent, speedy, and also lower in cost implications.

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Frequently Asked Questions Expand All

Clearly, the advantages of online trading outweigh that of offline trading in terms of transparency, control over the trading process, cost and speed. Online trading may look complex for first timers, but once you are familiar, it is surely a lot better.

The risks of online trading are the same as in accessing any online platform like ecommerce, online insurance, emails etc. Adopt certain basic practices regarding security and safety and you can have a good time online trading.