Online Trading in the Stock Market
Trade refers to buying and selling or exchanging goods or services between individuals or firms or countries. For example, furniture, clothes, gold, shares, etc. Earlier, it can be done only in the area where the buyer resides because of geographical and territorial restrictions. But now these hindrances have been removed by online trading. It had made the world a global village. Now we can buy or sell goods or services in any part of the world while sitting at home. We can even trade-in financial products through the online medium which can include bonds, stock, futures, international currency, and other financial instruments. The trading on the stock market is done on the stock exchange which is known as a place where buyers and sellers can meet and decide upon a price to transact their shares. This can be done with the help of the broker.
Brokers are the individual or firm assisting the investors regarding current stock prices or market trends and aids the investors in investing their funds in profitable shares. Nowadays, in online trading investors and brokers don’t meet physically, in fact, they transact with the help of the internet only and they can execute the transactions even faster. There are many best mobile trading app in India that are very useful to the investors.
Procedure for online trading in stock exchange:-
- Selection of the broker:- Firstly, select the broker registered with SEBI who will transact on behalf of the investor.
- Opening of Demat account:-Demat account refers to the account in which securities or shares are held electronically with the depository. An Indian citizen needs to open Demat account for trading in shares electronically.
- Placement of order:- After the opening of the Demat account, order for buying of the particular number of shares is placed. It can be placed either directly or indirectly.
- Execution of order:- As per the investor’s instructions, the broker executes the order and prepares a contract note in which all the details are mentioned and is signed by him
- Settlement of transaction:- This is the last step of online trading in which the securities are transferred in the investor’s account in the electronic form which can be settled on the spot or in some future date.
Benefits of online trading are:-
- Convenient:- online trading is convenient to access from any part of the world as long as the investor has a trading account and internet.
- Cheap:- Brokerage fee is lower on online trading than trading done by the traditional method.
- Control:- In this, the investor can transact easily whenever he wants and instead of seeking help from the broker, the investor can have access and review various options himself.
- Rapid transactions:- It is an efficient way of trading and funds can be transferred in almost no time.
Hence these are the benefits of online trading. For making online trading more efficient there are various apps for the same which has made the life of the investors easier as they can now track their stock and shares whenever they want. Moreover, there are tools in the apps which help the investors to analyze and evaluate that which shares are doing good in the market and where to invest and where not to.