What is Online Trading?

Trading is when a buyer and a seller agree to exchange financial product (shares, futures, options, currencies, commodities, etc.) at an agreed price. A trader is looking to earn a profit by buying or selling the financial product on a short-term basis. Trading could be of two types viz. offline trading or online trading.

Offline Trading

This happens when a trader places her/his trade through a broker. The trader calls the broker and asks her/him to place trades on behalf of the trader.

Online Trading

This is when traders place trades on their own through the internet. Broker provides a software that the trader can use to place trades online. The trading software can be downloaded on a desktop computer or with some brokers like Upstox, the platform is available on mobile phones and tablets.

  • Advantages of Online Trading

  • Some advantages of trading online are:
  • Convenience: Trading happens in realtime and therefore, trading is faster than offline trading.
  1. Cost effective option: Eliminates the broker’s involvement hence reducing the cost of investing for the broker service and the trader.
  2. Easy to learn
  3. Faster than offline trading

Online Trading accounts for more than 30% of the trading done in India. That percentage is now increasing every year. Most leading brokers in India offer online trading software to their clients.

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