Online Trading in 2020 – Advantages and Disadvantages of Online Trading?
Buying and selling financial product like stocks, Currency, Commodity, Derivatives through internet called online trading. Online trading require online trading platform, Good internet connection for order placements
Online Trading is the new world concept and every technology has some pros and cons.
Features of Online Trading
- Real time stock price and charts.
- Real time order and trade execution.
- Real Time Notification on screen.
- Quick holing and position views.
- Every second profit and loss updation
- No laptop or computer required. Online trading can also be done from a mobile application.
- Multiple Market Watch.
- Real Time quotes and customization market data.
- Stock Exchange and SEBI authorized online portals.
Advantages and Disadvantages of Online Trading.
In today’s world, the Internet has changed the way all businesses operate. In the early days of the stock market, all transactions were done on paper and loudly. But over time, technology evolved and all stock market transactions began to take place online. There are many benefits to trading online. While other hand there are so many drawback of online tradings.
Below are the list of Advantages and Disadvantages of Online Trading in Indian stock market.
Advantages of Online Trading
Online trading is very popular tools for buying and selling of financial products. There are so many advantages of online trading and below we mention some benefits of online tradings.
1. Elimination of Physical Broker
Online trading frees you from the hassle of going to the broker’s office or calling him to buy / sell. Most of the time the phone in the broker’s office is busy and it takes a long time to match your call. It may also be a mistake to listen to the shares you mentioned and their number. All this can be avoided by this.
2. Multiple Option for Trading in one place
The investor can invest or trade in all types of options. Can invest in new IPOs, Bonds, Mutual funds, Gold, Commodities.
3. Real Time Price
You can immediately see the fluctuations in the market price or index, the chart of any stock and its historical price level.
4. Trading Control In Your hand
You can register in advance as well as set stop loss (this facility is only available on certain terminals) and set time alerts. You can keep a list of shares.
5. Easy Deposit & Withdrawal
You can immediately deposit the amount from the bank account linked to the account for shares. Or you can deposit the after-sales profit in your bank account immediately. When to check the details of transactions on the account. Experience secure transactions on all fronts can be gained through this.
6. Global Market Update
It is a wonderful experience to trade in the world’s top stock market.
7. Easy Market Access
You can buy/sell shares at any platform. Get real time market information about companies and stocks. Trades can send order from web, Desktop, Mobile App. Expert recommendation and investment advice easy available.
8. Flexibility of Time
You can place orders before start of a trading session. order can be placed offline during non-market hours.
9. Paperless Transaction
Your share certificate get deposited in electronic forms (Demat) in your trading account.
10. Records & Reports
Records and reports of all transaction available at clicks.
Disadvantages of Online Trading
The coin has two sides. Just as there are advantages to online trading, there are also some disadvantages to online trading.
1. Hidden Cost
Although the brokerage fee is lower, other facilities have to pay more. It seems like a lot of rounding up. Brokerage charges for online trading is very low but if you need call to broker for order placement they charges 2 or 3 times higher fees for that.
2. Technical Knowledge
Since the trading terminal runs on a computer system, those who do not have knowledge of computer internet have to spend a lot of time learning it.
3. System Error
Sometimes the website may run slow, the internet may not be up to speed, the computer may not respond, the server may go down, and the trading terminus may not be convenient to use.
The mechanism or systems fails due to the less speed of internet connections, its cause huge loss in trading.
4. No Control Over Decision.
Greed, Fear and Patients are the main factors for stock market success. It is very difficult to control your emotions at the time of heavy market fluctuations.
Also Read: 20 Golden Rules for Online Trading
5. Limited Knowledge
- Elimination of a broker could be mean trouble.
- Without proper investment advice could cause big loss.
- In bull market every decision of yours earns good profit but once market change the gears then is ts very hard to survive in stock market.
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