Share trading was carried online after the introduction of internet. Prior to this, it was carried through brokers who placed buy/sell orders on your behalf. Online trading account simplifies trading as compared to the one held with broker. There are several benefits of holding an online trading account Angel Eye from Angel One over the traditional trading account held with brokers.
What Is Online Share Trading?
Online trading refers to buying and selling financial instruments like stocks, bonds, mutual funds, and other assets through an electronic platform over the Internet. To facilitate this, there are various online trading platforms available.
Online trading has made trading available to the masses by digitising the share market. This is because now, the transactions can be carried out from any place with a stable internet connection and a digital device. Online trading has eliminated the need to visit the physical share market or broker’s office.
What Is Offline Share Trading?
Offline trading involves placing a buy or sell order of financial instruments through a broker. Offline trading is a more manual process and takes longer to execute because of the presence of intermediaries.
In this method, there is a higher chance of traders having limited transparency and having to depend on the broker to carry out the transaction for them. The charges involved in offline trading are comparatively higher. Hence, the majority of people prefer online trading.
Differences between Online and Offline Trading Accounts
Trading
With an online share trading account, the users can place their own orders. On the other hand, an offline account means that users need to avail the services of a broker to place orders. Instructions are specifically given to the brokers in an offline trade, which creates dependence on the broking agency. Such dependence is non-existent when you choose to trade through an online account.
Convenience
An online stock trading account is a good option for people who have an Internet connection and track their orders from the convenience and comfort of their homes or offices. In case users are not able to access stock broking sites or do not have access to an Internet connection, placing orders on the phone with their brokers is more advisable.
Fraud
Because online share trading provides users complete control over the transactions, the risk of potential frauds is eliminated. There are certain instances when the brokers execute trades on behalf of their clients without receiving permission, which can cause significant losses to the users who choose offline trading.
Expertise and Knowledge
When users opt for an online stock trading account, they may get carried away. Without doing proper research and understanding more about how the stock market works, they may buy or sell shares, which can result in huge losses. This is avoidable with offline trading because the brokers have several years of experience and knowledge, which can be beneficial for users as they receive accurate guidance through the broking service providers. Fortunately, most of the agencies that offer online trading services offer access to research reports and other technical and fundamental analyses to assist account-holders to gain a deeper understanding to make the right investment decisions.
When Should You Choose Offline Trading?
Certain investors might prefer personalised assistance regarding investment and portfolio management. Also, people who are less tech-savvy or do not possess a stable internet connection or device for online trading would have to opt for offline trading. A broker can also execute a complex trade on your behalf if you are unable to do it online.
What Are the Additional Benefits of Trading via an Online Trading Account?
- Lower charges/fees/brokerage
Online trading can be cost-effective as the online trading platforms charge lower fees compared to a broker carrying out the transaction on your behalf.
- Transparency
The investors can monitor the securities in real time as online trading reflects the current market price.
- Convenience
Online trading can be carried out from any place that is equipped with a stable internet connection.
- Fraud Preventions
Online trading accounts are safeguarded by advanced security features in addition to the SEBI rules and regulations.
- Automated investing
Your periodical investments can be automated through online trading. Moreover, features like limit order enable you to execute a transaction when the specified conditions are met.
What Are Some Online Trading Platforms?
There are 3 different types of online trading platforms:
Desktop Trading Software
It is a software that can be installed on your personal computer or laptop that facilitates online trading. On this platform, you can invest in marketable securities using real-time information available to you. This application requires a stable internet connection.
Web/Browser-Based Platform
Web or browser-based trading platforms are online systems that allow investors to buy and sell financial instruments directly through a web browser without the need to download or install any additional software.
Investing through this platform involves minimum internet usage and no downloads directly on the stock broker’s website. One of the main advantages of this platform is the immediate execution of orders and speedy settlements.
Mobile-Based Trading Applications
These applications are available for Android as well as iOS-based smartphones. As the device used for trading here is portable, mobile-based platforms help you execute your trading orders from anywhere on the go.
Conclusion
While both online and offline trading have their merits, the choice largely depends on individual preferences, technological proficiency, and specific financial goals. Ultimately, whether you opt for the digital ease of online platforms or the guided experience of offline trading, ensuring informed decisions and strategic planning is key to successful investment outcomes. Ready to take control of your financial future? Open a Demat account with Angel One today and start trading with confidence!
FAQs
How is online trading different from offline trading?
Online trading offers autonomy, lower costs, and real-time access, while offline trading provides personalised guidance and support but at higher costs and slower execution.
How do I choose between online and offline trading?
Assess your comfort with technology, need for advice, and access to a stable internet to decide. Online trading suits independent, cost-conscious traders; offline suits those needing guidance.
What are online trading risks?
The main risks include cyber threats, impulsive decisions, and technical issues. Use secure platforms, research thoroughly, and ensure stable internet to mitigate these.
Can I switch from offline to online trading?
Yes, by opening an online account with a broker, submitting KYC documents, and learning the platform’s features.
What support is available for online traders?
Online traders can receive market research, real-time data, customer service, educational resources, and security measures.
