What is Online Trading?

Trading is when a buyer and a seller agree to exchange financial products (shares, futures, options, currencies, commodities, etc.) at an agreed price. A trader is looking to earn a profit by buying or selling the financial product on a short-term basis. Trading could be of two types viz. offline trading or online trading.

Online Trading

This is when traders place trades on their own through the internet. Broker provides a software that the trader can use to place trades online. The trading software can be downloaded on a desktop computer or with some brokers like Upstox, the platform is available on mobile phones and tablets.

Advantages of Online Trading

Some advantages of trading online are:

  • Convenience: Trading happens in realtime and therefore, trading is faster than offline trading.
  • Cost effective option: Eliminates the broker’s involvement hence reducing the cost of investing for the broker service and the trader.
  • Easy to learn
  • Faster than offline trading

This type of trading accounts for more than 30% of the trading done in India. That percentage is now increasing every year. Most leading brokers in India offer online trading software to their clients.

Offline Trading

This happens when a trader places her/his trade through a broker. The trader calls the broker and asks her/him to place trades on behalf of the trader.

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