Historically, when trading in India first began, stocks were exchanged using a method known as the “Open Outcry technique.” During market hours, participants in this system would yell or use hand gestures to indicate price changes or the purchase and sale of shares. The interested party would contact these individuals, strike a deal, and record the details on a slip or form; then, at the end of the session, they would return to register the day’s transactions. The only people who could profit from this were those who had access to the building where the event occurred. With the introduction of technology, this procedure is now obsolete, and everything has moved online. No more shouting, yelling and battling over stock on the trading floor.
Online trading has made it possible for the average person to trade stocks with a minimum broker involved the present. From websites to mobile applications, trading has become accessible with a few clicks for everyone. This has attracted a large number of participants of all ages from throughout the nation.
- What is online commerce?
Online Trading is the practice of trading stocks using a website or mobile application as opposed to phoning a broker or using other conventional means. These platforms are supplied by online brokers. Accessing these platforms is simple; all you need is a reliable computer or mobile device with an internet connection to begin trading. You may purchase and sell stocks from the comfort of your home or office.
- The method of internet commerce
When you make an online order to purchase or sell stocks, the transaction is processed in a matter of seconds. However, there is a great deal occurring behind the scenes that enable these deals to be executed in seconds. The procedure requires.
You place an order and it gets registered
The order is then entered into a database.
The system then waits for a matching seller or buyer, depending on the kind of order made, and sends a confirmation message to both parties when a match is discovered.
Order and cost are notified to the regulatory agencies.
The regulatory organizations then preserve the transaction data in case they choose to examine your prior transactions.
A contract is delivered to the broker who sold the shares and the broker who purchased the shares.
The broker has a maximum of three days to consummate the transaction by exchanging cash for shares.
The account is subsequently deducted, and the shares are formally in your possession.
- What are the advantages of online trading?
With the use of technology in trading, several advantages have resulted. The advantages of online trading include the following:
More freedom from stockbrokers
Before the advent of internet trading, stock traders would call their stockbrokers. While calls were logged, the likelihood of human mistakes was substantial. During the trading of something as crucial as leveraged stocks, particularly during intraday trading, a single miscalculation might result in catastrophic losses.
Stable Internet connectivity is all that’s required for intraday trading. Everything is shown on the screen in front of you. Eliminating the trader and phone call drastically decreases time and the likelihood of a human mistake.
In addition, when the market is turbulent, stockbroker dealers stay active. The opposite is true with internet trading. The trader may rapidly control everything with the push of a mouse.
Online Trading is more rapid
Historically, to trade stocks, one had to contact the stockbroker’s dealers. Then, your call would sometimes be put in a queue. After connecting to the broker, you would see the stock and sale specifics. With internet trading, this is all accomplished with the press of a mouse. Even minutes count in intraday trading for volatile equities. Thus, internet commerce is faster.
More exposure to the stock market and financial markets
In online trading, all stocks and financial information are shown on the website. You make individual judgments and are finally exposed to comprehensive stock statistics.
Locational adaptability
Currently, the majority of reputable trading platforms include mobile applications. This implies that you can control your inventory from anywhere. The only need is an Internet connection. Using an app on your mobile device, you may trade on the move.
Trader receives notifications
When trading stocks over the phone, you must continually seek an explanation from your broker. You may modify the settings for online banking to get email and SMS notifications. This might assist you in periodically keeping track of your stock transactions.
Real-time monitoring of stock prices is possible.
Online trading enables real-time stock transactions. This implies that you may verify the precise price of the stock on the internet, rather than checking it with your broker each time. Also, due to the rapid nature of the trade, you would get the shares at a precise price.
Even a few minutes of delay in highly leveraged intraday trading may result in losses of thousands or more.
Less costly than phone trading
Online trading is less expensive for both the broker and the trader than phone trading. In phone trading, the broker must make investments in dealers. This also implies that the broker will charge the investor a fee for infrastructure maintenance.
Also, for this reason, the majority of large stockbrokers have developed their internet trading platforms. It saves them money and also saves the trader money.
Single access point to all stock exchanges
The best stock trading platform enable simultaneous trading on various stock exchanges, often using the same website. This indicates that you manage not just various equities but also your assets across different stock exchanges using a single computer.
Even if your broker permits you to trade across various stock exchanges through the telephone, the process will be tedious.
- Conclusion
Online Trading is unquestionably much superior to telephone trading. It is more convenient, saves time, minimizes danger, and saves money. There is no doubt as to whether one should switch to online trading, but one must choose a broker. This technology has made creating a Demat account quicker, easier, and possible from the comfort of your own home.
