Online Trading - An Advancement in Stock Trading..
There are many investors who have online trading account, as it is the easier way to transact in the stock market. But there are many benefits and some points to remember during the online trading. If you use or going to use online trading, then this article will help you to understand the benefits and also the complications involved in online trading.
What is Online Trading?
Online trading is just an advancement in the traditional stock trading. In traditional method, investor has either to go to broker’s place or has to call him through phone to place the order. But online trading is like the investor is himself sitting on a stock trading terminal. An online platform wherein an investor can transact/invest in Stocks, F&Os, Commodities etc., directly, is called Online Trading.
Benefits of Online Trading:
# Online trading is a hassle free and faster method for stock trading or investing.
# You can post your order at anytime of the day (24*7).
# As stated above, online trading is like the investor is himself sitting on a stock trading terminal.
# You can have option for Stoploss for Selling and Price band for buying the stocks.
# You can view the stocks in your portfolio anytime.
Points to Remember during Online Trading..
Benefits of online trading are listed above. But there are some points to remember while doing stock trading online.
Share Market Timing in India:
As mentioned in benefits, you can do online trading anytime i.e., 24*7. But our share market has timings. National Stock Exchange (generally known as NSE India) will be open from Monday to Friday between 9.15 AM and 3.30 PM. Orders placed through online trading but within this time only taken into account for trading. So, How can we place order anytime of a day? The point to be noted here is you can place the order even if the market is closed. But the price of the stock(s) traded by you at that time will be the price of the stock(s) when market opens again on the next business day. For Example if you order a stock on Saturday. The order will be executed on Monday morning 9.15 AM.
Online Trading & Power of Attorney:
Online trading is a hassle free and faster method, because you can place the order directly. If you are selling a stock, in traditional stock trading method, you need to give your broker a delivery slip. After which, the amount will be paid to you through cheque. This delivery slip should be signed and given in person. In online trading method, you can give power of attorney (POA) to your broker. By giving this POA, after selling your stock(s), you can just call your broker and inform him about this. They will credit the amount directly to your bank account.
See to it..
You must be careful after giving POA. With that POA, the broker was able to buy or sell stocks on your behalf and you are the responsible for the loss during that trade as the POA gives legal permission for the broking company to do stock trading on your behalf.
In most of the broking firms, Online Trading Account is Free. It is general attitude of people to avail the benefits given as much as possible. So everyone will be happy to get a Free Online Trading Account, nothing wrong in this. But, if you are not trading frequently, you can reconsider for availing the Online Trading Account offer.
Once you get User Name & Password for your Online Trading Account, don’t disclose it to anyone. Try to memorize it rather than writing or storing it somewhere. Enter into your account and have a look at your portfolio once in a while. If there is any addition or reduction in number stocks, immediately inform it to the broking company.
Necessity is mother of all inventions.
Any advancement will have their pros and cons. We should analyse what we need and utilize the best of resources available for us.
Online trading is the easy and best way to invest in stock market no second thought in it. You can use online trading effectively to create wealth. If you are really interested in creating wealth, you can take our 30 Min FREE Financial Consultation Service by clicking the button below.