Purpose of this article :
Understand basics of Online Stock Market Trading in India.
Provide detail about popular online stock trading companies in India.
Compare and discuss about stock trading websites, their products and services.
Brief Introduction - Online Stock Market Trading
1.Stock Exchange
Stocks (Shares, equity) are traded in stock exchange. India has two big stock exchanges (Bombay Stock Exchange - BSE and National Stock Exchange - NSE) and few small exchanges like Jaipur Stock Exchange etc. Click here to see the list of Stock Exchanges in India
Investor can trade stocks in any of the stock exchange in India.
2.Stock Broker
Investor requires a Stock Broker to buy and sell shares in stock exchanges (BSE, NSE etc.). Stock Broker are registered member of stock exchange. A stock broker can register to one or more stock exchanges.
Only stock brokers can directly buy and sell shares in Stock Market. An investor must contact a stock broker to trade stocks. Broker charge commissions (brokerages) for their service. Brokerage is usually a percent of total amount of trade and varies from broker to broker.
3.Stock Trading
Traditionally stock trading is done through stock brokers, personally or through telephones. As number of people trading in stock market increase enormously in last few years, some issues like location constrains, busy phone lines, miss communication etc start growing in stock broker offices. Information technology (Stock Market Software) helps stock brokers in solving these problems with Online Stock Trading.
Online Stock Market Trading is an internet based stock trading facility. Investor can trade shares through a website without any manual intervention from Stock Broker.
In this case these Online Stock Trading companies are stock broker for the investor . They are registered with one or more Stock Exchanges. Mostly Online Trading Websites in India trades in BSE and NSE.
There are two different type of trading environments available for online equity trading.
1.Installable software based Stock Trading Terminals
These trading environment requires software to be installed on investors computer. These software are provided by the stock broker. These softwares require high speed internet connection. This kind of trading terminals are used by high volume intra day equity traders.
Advantages:
Orders directly send to stock exchanges rather then stock broker. This makes order execution very fast.
It provides almost each and every information which is required to a trader on a single screen including stock market charts, live data, alerts, stock market news etc.
Disadvantages:
Location constrain - You cannot trade if you are not on the computer where you have installed trading terminal software.
It requires high speed internet connection.
These trading terminals are not easily available for low volumn share traders.
2. Web (Internet) based trading application
These kind of trading environment doesn't require any additional software installation. They are like other internet websites which investor can access from around the world through normal internet connection.
Below are few advantages and disadvantages of Online Stock Market Trading :-
Advantages of Online Stock Trading (Website based):
Real time stock trading without calling or visiting broker's office.
Display real time market watch, historical datas, graphs etc.
Investment in IPOs, Mutual Funds and Bonds.
Check the trading history; demat account balance and bank account balance at any time.
Provide online tools like market watch, graphs and recommendations to do analysis of stocks.
Place offline orders for buying or selling stocks.
Set alert to inform you certain activity on the stock through email or sms.
Customer service through Email or Chat.
Secure transactions.
Disadvantages of Online Stock Trading (Website based):
Website performance - sometime the website is too slow or not enough user friendly.
Little long learning curve especially for people who doesn't know much about computer and internet.
Brokerages are little high.
Below is the detail comparison of major Online Stock Market Trading websites in India. This comparison is to help investor to take calculated decision while searching for new trading portal.
1. ICICIDirect
2. Sharekhan
3. Indiabulls
4. 5Paisa
5. Motilal Oswal Securities
6. HDFC Securities
7. Reliance Money
8. IDBIPaisaBuilder
9. Religare
10. Geojit
11. Networth Stock Broking
12. Kotak Securities
13. UTI Securities Ltd
14. Angel Trade
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We’re going to break down stock trading training for beginners so it doesn’t seem scary. One of the first things you need to do when you start out is to pick a good broker. A stock broker is going to be where you do all your business. Picking one that has large commissions and fees can be detrimental to a beginner.
ReplyDeleteAn important second step is going to be learning how to read a stock chart. The stock chart holds all of the clues to which direction the stock is going to move. Watch our ThinkOrSwim video on charts setup.
Another great resource for learning to read a chart is stockcharts.com. They have a chart school for any questions that you might have. Charts can look like Greek when you’re starting out. The more you look at a chart, the more you’ll understand it and be able to predict trends.