Online Trading Vs Offline Trading In India
Last Updated: Jan - 10- 2020
The stock trading industry in India has seen several developments over the years. Until 2000, the only way to trade in the Indian stock market was Offline trading. Offline trading involves interacting with your broker to book orders, generate reports, garner insights etc through means such as telephone or in-person. Therefore, a trader cannot do these activities online and has to depend on the broker. Online trading started from January 2000 onwards in India. SEBI allowed trading via the internet with which investors could trade from any corner of the world. Since then online trading has picked up dramatically in India. Access to cheap and relatively high-speed internet during the last few years has enabled the further proliferation of online trading. Most offline traders and investors have already shifted to online trading-investing. There are several benefits when it comes to online trading. Let us compare both in detail:
It is simple to trade
During offline trading, you would be required to engage with the broker for every trade. This would usually happen over a telephone call or in person. This could cost precious time and some of the trending trades may miss because of the delay in communication. Also, many offline trading services don’t operate during non-market hours. Finding broker service near your house or contacting them at earliest may seem difficult. Whereas in online trading you have the mobility to take your own decisions while trading. There is no dependency hence you can buy and sell whenever you wish from your computer or mobile device by sitting anywhere in the world.
Offline trading might require substantial paperwork. Conventional offline traders may not have the right kind of tech platforms. Online brokerages eliminate the need for paperwork. Apart from the on-boarding process, a trader wouldn’t have to deal with any paperwork when it comes to online traders. Recently, on-boarding process has also become completely online. Details about one’s portfolio, reports, holdings and transactions can be easily viewed online.
Time and Effort
Conventional offline brokers may sometimes require traders to visit their offices. They may not be adept at providing support over telephone or chat. Hence traders might get frustrated dealing with offline brokers. Online trading is quick, efficient, simple and transparent. It brings the trading on your fingertips which can be accessed at any time. As long as the platform is stable you can carry out transactions saving lots of effort, especially for active traders.
Conventional brokers charge a hefty brokerage but they give certain additional services like stock recommendations. The high brokerage could impact the profit margins of the trader. However, online platforms provided by full service and discount brokerages charge competitive commissions. You can compare brokerage charges of these service providers and choose the one with minimal brokerage fee to save money.
Insights offered to customers
Online traders also supply their customers with a substantial quantity of research reports as well as other insights. This enables customers to analyze the trading decisions made in the past and suitably modify their trading strategies for the future. Online traders also employ seasoned executives who offer best of class insights to customers. Customers are provided guidance on both fundamental and technical analysis which aids their trading strategies.
As we already know offline trading completely depends on the broker's suggestions. In this case, you cannot analyse the reports, market data, quotes which helps the investors to make the best decisions. This is the only way to understand the stock market in depth. Online trading has all these benefits being more transparent about the market.
Customers are in better control of their transactions when it comes to online trading. Customers are kept informed about everything related to their demat account and transactions. A customer can research about trades made in the past as well as the returns generated on her transactions. The customer can easily track the charges incurred along with the taxes applied. However, it isn’t convenient for customers to get all this information through offline trading. It may be difficult for customers to keep track of their transactions and such loopholes could be exploited by unscrupulous offline brokers. From the above comparison, we can conclude that online trading has several benefits over offline trading. Offline trading has almost become obsolete.
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