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Online trading is more fast paced and efficient as compared to the older floor trading and phone trading.
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Introduction to Online Trading and its Windfalls and Downfalls.
Online trading (or Internet trading) is the buying and selling of securities through the internet. • It is fast becoming one of the best ways to invest in the stock market. • The Stock Market is a place where people from all over the world come to buy and sell stocks, which are an asset and an ownership in a company. • Stock trading in India started permitting outside investments only in the 1990s.
Information technology is used to bring together buyers and sellers through an electronic trading platform and network to create virtual market places. • Examples of such market places are NASDAQ, NYSE Arca and Globex which are also known as electronic communication networks (ECNs). • You don't need to have a personal broker or a disposable fortune to do trading, and most analysts agree that average people trading stock is no longer a sign of impending doom.
Online trading is fast paced and efficient as compared to the older floor trading and phone trading. • But blunders and cancelled trades do still occur in online stock trading. • Opening an online trading account is also quick and easy making the entire process highly effective.
Online stock trading and online share trading has given way to paperless transactions. • It eliminates manual order entry and paper trail. • Your share certificates get deposited in electronic format (Demat) in your web trade account. • It increases accuracy and speed of placing order. • Stock market trading enables better record keeping by investors, brokers and regulatory organizations.
Investors can make more informed investment decisions because they have access to vast amounts of data in online depositories. • It facilitates extended hours of trading. • Orders can also be placed offline during non-market hours. • Investors are benefited with complete control of investing decisions.
Low internet speed could lead to technical error or system failure due to which the investor may suffer a huge loss. • Some online brokers charge apathy fees from traders. • If you trust them, without any enquiry, it could prove to be a risk. • Online trading empowers investors with the ‘do it yourself attitude’ that could prove to be a loss in certain scenarios. • They could make uninformed mistakes owing to lack of knowledge.
The aforementioned guide rightly structures out the definition of online trading and its numerous advantages and disadvantages. • Read about all the varied nuances of online trading online to understand how it works and how you can be a part of it.
