| ON LINE TRADING – AN OVERVIEW | | | | trading. With an efficient and trusted broker, investor |
| ABSTRACT | | | | can effortless manage the portfolio without spending |
| Constructive use of new | | | | any time for that. |
| technologies has always contributed positively | | | | DISADVANTAGE OF OFFLINE TRADING |
| towards improving human life standards and | | | | - Often times the broker’s takes time to |
| economy of the country. Such as Online trading, in | | | | execute investor’s instructions of buying or |
| equity markets it increased trade volume and number | | | | selling the stocks that might incur losses. |
| of investors trading in stock markets. Online trading | | | | - Offline trading brokerage is always higher than that |
| was started in India in the year 1995, where a new | | | | of online brokerage. |
| system is formed which allows the investor to trade | | | | PRODUCTS AND SERVICES ON THE ONLINE |
| through an internet site where banks and demat | | | | TRADING INDIA |
| accounts are electronically integrated. Such services | | | | The major financial products and services of the |
| are provided by many financial institutions like ICICI, | | | | online trading India are like equities, mutual fund, life |
| Religare, HDFC, India Bulls & so on... | | | | insurance, general insurance, loans, share trading, |
| INTRODUCTION | | | | commodities trading, portfolio management and |
| Online trading India is the internet based investment | | | | financial planning. |
| of the broker. There are many leading online trading | | | | NATIONAL STOCK EXCHANGES AND BOMBAY |
| portals in India along with the online platforms of the | | | | STOCK EXCHANGES |
| biggest stock houses like National stock exchanges | | | | In spite of many private stock houses at present |
| and the Bombay stock exchange. | | | | involved in online trading in India, the NSE and BS$E |
| FACILITIES OF THE ONLINE TRADING INDIA | | | | are among the largest exchanges. They handle huge |
| The investor has to register with an online trading | | | | daily trading volumes, supporting large amounts of |
| portal and get into an agreement with the firm to | | | | date traffic, and possessing a countrywide network. |
| trade in different securities following the terms and | | | | The automated online systems used for trading by |
| conditions listed down on the agreement. The order | | | | national stock exchanges and Bombay stock |
| processing is done in correct things as the serves of | | | | exchanges are the NIBIS & NSE’S Internet |
| the online trading portal are connected to the stock | | | | based information systems and NEAT for the national |
| exchange s and designated banks all round the clock. | | | | stock exchanges and the BSE online trading system |
| They can also get updates on the trading and check | | | | or BOLT for the Bombay stock exchange. |
| the status of their orders either through e-mail or | | | | MAJOR PLAYERS IN ONLINE TRADING BROKERAGE |
| through the interface. Brokerage also provides | | | | HOUSE IN INDIA |
| research content on their web-sites, such that the | | | | ? ICICI Securities Ltd |
| clients can take down decisions on stocks before | | | | ? Kotak Securities Ltd |
| investing. | | | | ? India bulls financial services Limited |
| | | | | ? India Infoline |
| REVIEW OF LITERATURE | | | | ? IL & FS investment Limited |
| “Online stock trading in India: An empirical | | | | ? SSKI Ltd |
| investigation” | | | | ? Motilal Oswal Securities Ltd |
| In 2007, Nidhi Walia and Ravinder Kumar’s | | | | ? Religare Securities Ltd |
| research report examined the investors’ | | | | ? Geogit Securities |
| preference for traditional trading and online trading, | | | | ? HDFC Securities |
| investor’s perception on Online trading & | | | | ONLINE TRADING: INDIAN SCENARIO |
| comparing current usage of online trading and offline | | | | In the Indian context, online trading can be rightly |
| trading. This study reveals that out of every 100 | | | | called as a recent phenomenon, which took with the |
| investors only 28 trade online, which points out a | | | | change of century i.e. April 2000, and even till day |
| question as why investors were not able to realize | | | | online trading is not much popular among investors |
| the importance of technology in stock trading. | | | | for which a list of factors can be blamed. This fact is |
| The major findings of the study are the Indian | | | | more clearly from the information available that while |
| investors are more conservative, they do not change | | | | number of stock exchanges in India has grown from |
| brokers for trading, whereas net traders are more | | | | 7 exchanges in1946 to total 23 exchanges till 2005. |
| comfortable with online trading for its transparency | | | | Only 2 stock exchanges are providing online share |
| and complete control of the terminal | | | | trading. Indian stock exchanges have started |
| TRADING | | | | adopting technology because it provides the |
| Trading is defined as buying and selling shares in | | | | necessary edge and ensure timeliness and |
| stock exchanges. There are two types of trading i.e. | | | | satisfaction in customer service. |
| online trading (via internet) and offline trading (via | | | | However mainly 5 companies control 90 5 of the |
| broker or call). | | | | market in internet trading, ICICI has around 50% |
| Gone are the days when the | | | | market share, whereas India Bulls hold 26% share, |
| investor must have a stock broker to deal in stocks | | | | Other dominant players are Kotak Securities and |
| and make investments. In this age of internet, when | | | | Share khan. ICICI has been able to gain its dominant |
| everything is going online, stock trading has also gone | | | | presence in Internet trading because they have |
| online. Just like the offline stock trading investor can | | | | strong connectivity of stock trading, demat account, |
| now buy or sell stocks online with just a few clicks | | | | bank account, etc., ICICI Direct has recorded 6, |
| of the mouse. There are obliviously some advantages | | | | 75,000 registered customers and has become 19th |
| and some disadvantages of both these form of | | | | larger online broker in US whereas Share khan and 5 |
| trading. | | | | paisa are loosing their way. |
| ADVANTAGES OF ONLINE TRADING | | | | CONCLUSION |
| - Typically online trading requires the investors to pay | | | | The onset of online trading changed the traditional |
| lower brokerage. | | | | value proposition of trading, allowing online brokers to |
| - In case of online trading there is no middle man | | | | supply investors with rich, interactive information in |
| involved. | | | | real time including market updates, investment |
| - In case of online trading there is no paper work | | | | research and robust analytics. The result is an |
| involved. | | | | integrated trading experience that combines |
| - Trading on a real time. | | | | execution with interactive analysis shown by growth |
| - Investors can deal with different stock exchanges | | | | of the online customer community from a mere |
| with single online trading account. | | | | 23000 average trades on NSE per day in a year |
| DISADVANTAGES OF ONLINE TRADING | | | | 2000 to over 52000 average trade in 2002. |
| - In online terminal, investors can’t set | | | | Online trading has gained momentum from just 0.5% |
| customized expert advice, whereas in offline the | | | | of total traded volumes 5 years back, which how |
| broker gives suggestions according to investors | | | | accounts for 5 5 of the total trading volume of |
| strategy (i.e. Short term or Long term) | | | | approximately Rs. 14000cr on NSE. Over the past 2 |
| - Privacy is less due to lacking scandals. | | | | years, the value of all trades executed through |
| - Transactional errors due to technical problems. | | | | internet on NSE has grown from less than Rs.100 Cr |
| ADVANTAGES OF OFFLINE TRADING | | | | in June 2003 to over Rs.700 Cr in June 2005. |
| - It is the most trusted and the oldest form of stock | | | | |