Before the emergence of online trading, investors had to call their brokerage firms and place buy and sell orders for them to execute trades. It used to be a time-consuming process that naturally led to numerous issues. Surprisingly, many investors continue to engage in offline trading today.
However, most traders have switched to online trading platforms since the internet’s introduction in this digital era. With online trading, you can place buy and sell orders, set market limits, examine the status of an order, read company news, view the list of equities currently held via the dashboard, and access your past investment statements. Online trading has also reduced expenses for both investors and traders.
Advantages of Online Trading
A few advantages of share trading are:
- Cost-Efficient: You need to pay the stockbroker fee in online stock trading is less than the commission charged by traditional methods. You may also be able to negotiate your broker’s fees if you trade in a large enough volume of stocks.
- Monitor Investments: Online trading enables you to buy or sell shares conveniently. It provides intricate user interfaces and the capability for investors to track the progress of their funds throughout the day. You can calculate your profit or loss using your phone or computer.
- Eliminates Intermediaries: Stock trading allows you to make trades without communicating with your broker. Besides lowering overall trading costs, this benefit eliminates trading hassles, making this service much more profitable.
How to start online trading?
- Choose a Broker: A stockbroker, such as ICICIdirect, is a participant in a depository who mediates transactions between investors and stock exchanges. For a small fee, a stockbroker offers the ability to open a Demat and Trading Account so that you can use online share trading and store the shares you’ve purchased. In India, there are two different brokers: full-service brokers and discount brokers.
A discount broker charges a flat fee regardless of the number of trades, while full-service brokers charge fees based on the volume of transactions. When choosing a broker, you should consider the brokerage fees and other applicable fees.
- Open Demat / Trading Account: After choosing a broker, you must open a trading account and a Demat account. Each broker has a different process for opening an account but thanks to technology, opening an online Demat account is now simple and hassle-free. Fill out your personal information, submit documents, and enter your bank information, and your account will be activated within a few hours after your information is verified.
- Understand Online Platforms: After choosing the best broker and opening a Demat account, the next step is to learn about their trading platforms. These days, many brokers offer a variety of trading platforms for the stock market, including downloadable software, desktop, browser-based software, mobile trading apps, etc. Go through them all and choose the one you believe is simple to use wherever you are.
