What is Internet Trading In India?
Internet Trading:- The act of placing buy/sell orders for financial securities and/or currencies with the use of a brokerage’s internet-based proprietary trading platforms.
Internet Trading Advantage and Disadvantage.
Advantages Of Online Trading.
- Lower brokerage and fees (in almost all cases). Fees can be even lower if you’re a frequent trader.
- More control on your transactions. you can decide exactly what price and time you wish to buy, down to the fraction of a second, as well as change your order whenever you feel like. No waiting on the phone or having to go in person to a branch.
- More flexibility in terms of being able to see what options are available to you and scan the market.
- With online trading, you often have access to lower-fee mutual fund products since you are your own advisor and nobody gets a cut along the way.
- Handy tools to model interest earned, yield, returns etc., as well as financial screeners to research stocks and bonds.
- Good research tools and newsfeeds on each stock, which you can delve deeper into in your own time. A conventional offline broker may not always be able or willing to offer you all of these. you can also get many of these for free from sites like Marketwatch, Fool.com etc.
- Real-time values of your portfolio.
- If your online broker offers Level 2 quotes in real time, you can actually see what the bid and ask prices and volumes are and get a sense of where and how your order will fit in.
- Some online brokerages have access to research reports prepared by Standard and Poors and such, and these can give you some really good insight.
Disadvantages Of Online Trading.
- you’re on your own; you have to decide if it’s a good or bad buy/sell. you have no advisor to help you. If you’re not a pro, your risks may be higher.
- If you’re not careful, you could end up trading too much just because it’s so easy too but it’s in your hands to control.
- The advantages and independence of online trading far outweigh the disadvantages, but start slow, find a good brokerage with a good reputation and take it a step at a time till you feel confident enough and know the risks and rewards well. There’s no reason why you shouldn’t have a mix of online and offline holdings.
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