When an online platform facilitates buying or selling of financial products like stocks, mutual funds, bonds, derivatives, etc., it is called online trading.
But let’s not jump to the topic straight away, and start with an example.
Have you watched Scam 1992: The Harshad Mehta Story? If yes, you might have noticed the ‘men in blue’ of Dalal Street i.e. the jobbers in their blue suits going to a trading ring, shouting or negotiating share prices with hand gestures, and penciling down the final trades in small chits called sauda pads.
Times have changed, and everything is now online. The brokers still exist but they provide an online platform to execute buy and sell orders.
So, what is online trading? Lean on your chair and keep scrolling, the answers to all your questions are in the next few paragraphs.
Content
- What is Online stock trading?
- Advantages of online trading
- Disadvantages of online trading
- How To Trade Online?
- Types of online trading
- Best Company Offering Online Trading in India
- Top Benefits of Aliceblue
- Quick Summary
- FAQ(Frequently Asked Questions)
What is Online Stock Trading?
When an online platform facilitates buying or selling of financial products like stocks, mutual funds, bonds, or derivatives, etc., it is called online trading. It can’t get simpler than this. By all means, online trading is just like logging onto Amazon or Flipkart and buying stuff.
All you need is the internet, mobile or laptop, and some money to trade. That is it. You can trade from anywhere and whenever you want. This, my friends, is the essence of online trading.
To understand what is online trading, more undoubtedly, you must read about how online trading is done, the advantages and disadvantages of online trading, and its types as well. Keep reading below and find them all in the next sections.
Advantages Of Online Trading
- Online trading is the simplest way to buy and sell stocks.
- Traders can track the market and their trades in real time.
- Multiple forms of instruments are available on a single trading platform. For example, trading in stocks and buying gold bonds or MFs can be done on the same platform.
- You can trade online from anywhere and at any time.
Disadvantages Of Online Trading
- Online trading platforms are prone to technical glitches during highly volatile days.
- It might take some time for beginners to get familiar with advanced trading platforms.
How To Trade Online?
- Step 1: Open a Demat and a Trading account by approaching a SEBI-registered broker. You can open an account by submitting a few documents, like PAN, Aadhaar Card, a Canceled Cheque, Six Months Bank Statement, and a Passport Size Photograph.
- Step 2: Once the account is open, you need to transfer funds from your bank account to the trading account.
- Step 3: Voila! Now you can start online trading.
CLICK HERE TO OPEN YOUR ACCOUNT WITH US IN 15 MINS!
Types Of Online Trading
We have categorized online trading into 3 types:
- Quick Trades: Scalping and Intraday Trading
- Positional Trades
- Investing: Share Investing and Mutual Funds Investing
Quick Trades
Scalping
In scalping, the trades are taken only for several seconds to minutes, this strategy is mainly used in high volatile stocks to make the most of price movements. It is often referred to as micro-trading. Traders involved in scalping execute hundreds of trades in a day.
Scalping falls in a very high-risk category and requires a good amount of experience and expertise in the stock markets. You can do scalping with a small amount of money via leverages.
As the name suggests, intraday trading is basically buying and selling of shares on the same day. It is also known as day trading. The holding time in intraday trading can vary from a minute to hours. Usually, intraday trading is done based on technical analysis and news or events.
Intraday Trading also falls in a very high-risk category and requires some expertise in the stock market. You can do intraday with a small amount of money via leverages.
To understand everything about IntradayTrading click here.
When going for intraday trading, it is always advised to do thorough research and have the best strategies by your side. Click here to find out about the best intraday trading strategies.
Still confused about where to start and how to select stocks for intraday trading? Then this blog is just for you!
Positional Trades
Positional Trading
If you hold a stock for more than a day, it is known as positional trading. It is based on the idea that the value of the stock will appreciate in several days to months. Here the traders follow a trend and wait for it to the peak.
Positional Trading can further be categorized into swing trading, which is again a trend-following strategy but is popularly said to have a holding period of several weeks.
Positional Trading falls in the medium-risk category and requires a higher amount of capital as you need to pay the full amount for the shares you buy.
Investing
When you buy shares to hold them for several months or years, it is called investing. Investing can be done in shares or mutual funds.
While Investing in shares falls in the medium-risk category, mutual funds are considered to be low-risk instruments.
Why do we say so? Find it yourself, we have an article on the exact same topic!
The above types were the technical aspects of online trading. Let’s find out about different forms of online trading. Click on the links provided below to read about them in detail.
| Trading Types |
| What is Algo Trading? |
| What is Premarket Trading? |
| What is Commodity Trading? |
| What is Futures Trading? |
Best Company Offering Online Trading in India
There are two types of brokers, a discount broker, and a full-service broker.
A discount broker provides you trading and investing services at the lowest possible cost, and a full-service broker provides full-blown services like investing tips, hand-holding, trading reports, etc. but all these services come with a higher cost.
Well, Aliceblue is an Exception! We provide the services of a full-service broker but at a cost of a discount broker. Meaning, we charge the lowest brokerage yet provide full-blown services like a full-service broker.
Top Benefits of Aliceblue
To further make your trading experience smoother we offer a single account for Equity and Commodity Exchange.
Brokerage
We offer two brokerage plans:
- Trade Pro Plan: Offers Higher Margin with slightly Higher Brokerage.
- Freedom 15 Plan: Offers Decent Margins with Lowest Brokerage in the Industry.
Charges List
| Segments | Brokerage |
| EQ Intraday(NSE, BSE) | ₹ 15 per order or 0.05%, whichever is lower |
| EQ Delivery(NSE, BSE) | 0 |
| FUT(NSE, BSE) | ₹ 15 per order or 0.05%, whichever is lower |
| OPTION(NSE, BSE) | ₹ 15 per Order |
| FUT(MCX) | ₹ 15 per order or 0.05%, whichever is lower |
| OPTION(MCX) | ₹ 15 per Order |
| CURRENCY FUT(NSE, BSE) | ₹ 15 per order or 0.05%, whichever is lower |
| CURRENCY OPT(NSE, BSE) | ₹ 15 per order |
| NOTE*:Bracket Order charges are applicable at Rs. 4+GST on every executed order | |
Margins
| Segment | CNC/NRML | MIS | CO | BO |
| NSE CASH NIFTY 50 STOCKS | MAX 5X /(APPLICABLE+VAR+ELM) | MAX 5X /(APPLICABLE+VAR+ELM) | NA | MAX 5X /(APPLICABLE+VAR+ELM) |
| NSE/BSE CASH A GROUP STOCKS | MAX 5X /(APPLICABLE+VAR+ELM) | MAX 5X /(APPLICABLE+VAR+ELM) | NA | MAX 5X /(APPLICABLE+VAR+ELM) |
| NSE/BSE CASH OTHER GROUP | 1X TIMES | NA | NA | NA |
| NSE FUT NIFTY-50 STOCKS | AS PER SPAN+EXPOSURE MARGIN | AS PER SPAN+EXPOSURE MARGIN | AS PER SPAN+EXPOSURE MARGIN | AS PER SPAN+EXPOSURE MARGIN |
| NSE FUT OTHER STOCKS | AS PER SPAN+EXPOSURE MARGIN | AS PER SPAN+EXPOSURE MARGIN | AS PER SPAN+EXPOSURE MARGIN | AS PER SPAN+EXPOSURE MARGIN |
| NSE INDEX OPTIONS BUY | AS PER PREMIUM | AS PER PREMIUM | NA | NA |
| NSE INDEX OPTIONS SELL | AS PER SPAN+EXPOSURE MARGIN | AS PER SPAN+EXPOSURE MARGIN | NA | NA |
| MCX | AS PER SPAN+EXPOSURE MARGIN | AS PER SPAN+EXPOSURE MARGIN | AS PER SPAN+EXPOSURE MARGIN | AS PER SPAN+EXPOSURE MARGIN |
| CURRENCY | AS PER SPAN+EXPOSURE MARGIN | AS PER SPAN+EXPOSURE MARGIN | NA | NA |
Here’s how margins work:
Let’s say you have ₹10,000 in your trading account, if you are trading intraday using Bracket Order you can buy stocks worth ₹50,000.
Calculation: ₹10,000 x 5 times = ₹50,000
Check out this page for daily margin insights.
Trading Platform
We provide the most reliable and safe trading platforms with amazing features:
- Web-Based Application: ANT Web
- Mobile Application: ANT Mobi
All these trading platforms are very easy to use and provide 1-year plus historical chart data, 80+ technical indicators, multiple watchlists, and a lot of highly advanced features.
All in all, you will get the benefits of a Full-Service Broker at the price of a Discount Broker!
To understand the topic and get more information, please read the related stock market articles below.
| Corporate Vs Treasury Bonds |
| Futures Contract Vs Forward Contract |
| Technical Analysis |
| Value Investing |
| IOC In Share Market |
| Difference Between Online Trading and Offline Trading |
Quick Summary
- When an online platform facilitates buying or selling of financial products like stocks, mutual funds, bonds, derivatives, etc., it is called online trading.
- Advantages Of Online Trading
- Online trading is the simplest way to buy and sell stocks.
- Multiple forms of instruments are available on a single trading platform. Trading in stocks and buying gold bonds or MFs can be done on the same platform.
- Disadvantages Of Online Trading
- Online trading platforms are prone to technical glitches during highly volatile days, and it might take some time for beginners to get familiar with advanced trading platforms.
- To be able to do online trading, you need to have a Demat Account. If you don’t have it already and want to know how to get started, Click Here.
- There are basically 3 types of online trading:
- Scalping and Intraday Trading
- Positional Trades
- Investing
- There are two types of brokers, a discount broker, and a full-service broker.
- Alice Blue provides the services of a full-service broker but at a cost of a discount broker. Meaning, we charge the lowest brokerage yet provide full-blown services like a full-service broker.
- To further make your trading experience smoother Alice Blue offers a single account for Equity and Commodity Exchange
FAQ(Frequently Asked Questions)
Is Online Trading Safe In India?
Online Trading is absolutely safe in India. It is similar to any online transactions you make. Additionally, all the transactions are scrutinized by the Stock Exchange and SEBI themselves. This makes the overall process really safe.
We hope that you are clear about the topic. But there is more to learn and explore when it comes to the stock market, commodity and hence we bring you the important topics and areas that you should know:
