Icici Share Trading

ON LINE TRADING – AN OVERVIEW

ON LINE TRADING – AN OVERVIEW

ABSTRACT

            Constructive use of new technologies has always contributed positively towards improving human life standards and economy of the country. Such as Online Trading, in equity markets it increased trade volume and number of investors trading in stock markets. Online trading was started in India in the year 1995, where a new system is formed which allows the investor to trade through an internet site where banks and demat accounts are electronically integrated. Such services are provided by many financial institutions like ICICI, Religare, HDFC, India Bulls & so on…

INTRODUCTION

 Online trading India is the internet based investment of the broker. There are many leading online trading portals in India along with the online platforms of the biggest stock houses like National stock exchanges and the Bombay stock exchange.

FACILITIES OF THE ONLINE TRADING INDIA

The investor has to register with an online trading portal and get into an agreement with the firm to trade in different securities following the terms and conditions listed down on the agreement. The order processing is done in correct things as the serves of the online trading portal are connected to the stock exchange s and designated banks all round the clock. They can also get updates on the trading and check the status of their orders either through e-mail or through the interface.  Brokerage also provides research content on their web-sites, such that the clients can take down decisions on stocks before Investing.

 

 REVIEW OF LITERATURE

“Online stock trading in India: An empirical investigation”

In 2007, Nidhi Walia and Ravinder Kumar’s research report examined the investors’ preference for traditional trading and online trading, investor’s perception on Online trading & comparing current usage of online trading and offline trading. This study reveals that out of every 100 investors only 28 trade online, which points out a question as why investors were not able to realize the importance of technology in stock trading.

The major findings of the study are the Indian investors are more conservative, they do not change brokers for trading, whereas net traders are more comfortable with online trading for its transparency and complete control of the terminal

TRADING

Trading is defined as buying and Selling Shares in stock exchanges. There are two types of trading i.e. online trading (via internet) and offline trading (via broker or call).

            Gone are the days when the investor must have a stock broker to deal in stocks and make investments. In this age of internet, when everything is going online, stock trading has also gone online. Just like the offline stock trading investor can now buy or sell stocks online with just a few clicks of the mouse. There are obliviously some advantages and some disadvantages of both these form of trading.

ADVANTAGES OF ONLINE TRADING

• Typically online trading requires the investors to pay lower brokerage.
• In case of online trading there is no middle man involved.
• In case of online trading there is no paper work involved.
• Trading on a real time.
• Investors can deal with different stock exchanges with single online trading account.

DISADVANTAGES OF ONLINE TRADING

• In online terminal, investors can’t set customized expert advice, whereas in offline the broker gives suggestions according to investors strategy (i.e. Short term or Long term)
• Privacy is less due to lacking scandals.
• Transactional errors due to technical problems.

ADVANTAGES OF OFFLINE TRADING

• It is the most trusted and the oldest form of stock trading. With an efficient and trusted broker, investor can effortless manage the portfolio without spending any time for that.

DISADVANTAGE OF OFFLINE TRADING

• Often times the broker’s takes time to execute investor’s instructions of buying or selling the stocks that might incur losses.
• Offline trading brokerage is always higher than that of online brokerage.

PRODUCTS AND SERVICES ON THE ONLINE TRADING INDIA

The major financial products and services of the online trading India are like equities, mutual fund, life insurance, general insurance, loans, Share Trading, commodities trading, portfolio management and financial planning.

NATIONAL STOCK EXCHANGES AND BOMBAY STOCK EXCHANGES

In spite of many private stock houses at present involved in online trading in India, the Nse and BS$E are among the largest exchanges. They handle huge daily trading volumes, supporting large amounts of date traffic, and possessing a countrywide network. The automated online systems used for trading by national stock exchanges and Bombay stock exchanges are the NIBIS & NSE’S Internet based information systems and NEAT for the national stock exchanges and the BSE online Trading System or BOLT for the Bombay stock exchange.

MAJOR PLAYERS IN ONLINE TRADING BROKERAGE HOUSE IN INDIA

? ICICI Securities Ltd

? Kotak Securities Ltd

? India bulls financial services Limited

? India Infoline

? IL & FS investment Limited

? SSKI Ltd

? Motilal Oswal Securities Ltd

? Religare Securities Ltd

? Geogit Securities

? HDFC Securities

ONLINE TRADING: INDIAN SCENARIO

In the Indian context, online trading can be rightly called as a recent phenomenon, which took with the change of century i.e. April 2000, and even till day online trading is not much popular among investors for which a list of factors can be blamed. This fact is more clearly from the information available that while number of stock exchanges in India has grown from 7 exchanges in1946 to total 23 exchanges till 2005. Only 2 stock exchanges are providing online share trading. Indian stock exchanges have started adopting technology because it provides the necessary edge and ensure timeliness and satisfaction in customer service.

However mainly 5 companies control 90 5 of the market in Internet Trading, ICICI direct.com has around 50% market share, whereas  India Bulls hold 26% share, Other dominant players are Kotak Securities and Share Khan. ICICI has been able to gain its dominant presence in Internet trading because they have strong connectivity of stock trading, demat account, bank account, etc., ICICI Direct has recorded 6, 75,000 registered customers and has become 19th larger online broker in US whereas Share khan and 5 paisa are loosing their way.

CONCLUSION

The onset of online trading changed the traditional value proposition of trading, allowing online brokers to supply investors with rich, interactive information in real time including market updates, investment research and robust analytics. The result is an integrated trading experience that combines execution with interactive analysis shown by growth of the online customer community from a mere 23000 average trades on NSE per day in a  year 2000 to over 52000 average trade in 2002.

Online trading has gained momentum from just 0.5% of total traded volumes 5 years back, which how accounts for 5 5 of the total trading volume of approximately Rs. 14000cr on NSE. Over the past 2 years, the value of all trades executed through internet on NSE has grown from less than Rs.100 Cr in June 2003 to over Rs.700 Cr in June 2005.

 

 

 

About the Author

R.Yuvarani, M.Phil Scholar, Periyar University, Salem-11

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