When 3 billion of India’s total population has access to the internet and when it has become the primary source of every little thing in life, starting from the address of
your favourite café to daily grocery, then how could a vast industry like share trading remain away from the boon of this technology? Online share trading, as the name suggests, is a process by which investors and traders buy and sell securities over the internet. In order to facilitate a better trading platform with more
advanced tools and technology, many premium stock broking firms in India are now offering online broking option to the new-age technocrats so that they can make
investments and buy and sell equities from the convenience of their homes and access to the trading accounts from anywhere, anytime,
and on devices like mobile, tab, and desktop.
Besides the comfort of broking from home or from any part of the world, online share trading offers a plethora of benefits. Let’s take a look at each of them:
Before the emergence of online stock broking service, it wasn’t easy for people to watch the daily movement of self-portfolio. But after the introduction of the technology, it has become way easier to manage a portfolio without bothering about taking appointments from the brokers. One can login to their account from the website of a broking house, view the fluctuations of the stocks and buy and sell as per the requirement.
Some of the best online broking companies charge their clients on the basis of an individual transaction which is more affordable than if trades were made using a different method. Also, due to increasing competition in online stock broking service, the companies offer attractive commission charges to lure the clients.
Unlike traditional broking, online broking gives you the facility to have access to your trading account 24*7, even after the market is closed. You might not be able to buy and sell stocks post-market time but you can certainly login to your account and check your profile for understanding how your stocks are performing.
Often times, the best online stock brokers do not restrict clients from investing any amount of money as opposed to the traditional trading. This means the companies do not impose limits on the investors that require them to invest a minimum amount of money at a time.
In online broking, it is easy to avoid brokerage bias since the trading is in your own hand. Brokerage bias is the biased advice of the broker for buying and selling particular stock that might be a loss for you but definitely a profit for the former.
Many online stock brokers in India offer advanced online stock brokerage system to their clients and also provide access to a myriad of tools for online broking that help you to evaluate stocks in order to choose the best one.
Interpretation: This pie chart shows that despite knowing about online trading, more people still prefer traditional method of trading.
Source credit: http://www.scienceandnature.org/IJEMS-Vol8(1)-Jan2017/IJEMS%20Vol8(1)-4.pdf
For getting a good financial return, it is important to do proper research while choosing an online broking company. Consider these 7 important tips as mentioned below.
Choose as per your requirement: First thing first. Identify your trading style in order to choose the best online broker for stock trading. For instance, if you go for day trading then look for an online stock broker for day trading itself. Make sure that the broker is well equipped with all the technologies required for day trading.
Watch commission: It is for sure that online broking is cheaper than traditional trading as the former does not charge any hefty commission. But there are some big broking houses that take a large commission for providing online broking services. So, be careful. Do your research well and ensure that the company you choose does not charge a commission.
Check hidden cost: Go through the fine prints of the company and make sure that there is no hidden cost that you might be later on asked. Like for example, if you need to pay a monthly maintenance fee for keeping a minimum amount in your account.
Choose an easy to navigate platform: Whether you have an easy or complicated trading need, you must find an online stock brokerage system/platform that is easy to navigate. This will help you to avoid errors or costly mistakes while trading.
Look around and choose the best one: Review a wide number of broking websites to select the best online stock broker. Compare their services, charges, and terms and conditions to ensure that they suit your need.
Go through the products offered: Make sure that an online broker you choose offers other financial instruments for trading, in addition to equities. That may include mutual funds, insurance, national pension scheme and many others.
Customer service: Nothing can be more frustrating than a poor customer service. So, make sure that the company you choose has an efficient and spontaneous team of customer service.