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Article on Online Trading- How to open an account and its Miscellaneous aspects

As promised after my posts on comparison of online trading platforms and Brokerage Charges Comparison, the below article on online trading miscellaneous aspects which has been published in number of financial magazines and partially published in a number of stock market blogs or share market literature is again being published here for the benefit of the trading and investing fraternity.

Online trading account has changed the way India has been trading and thus all these agressive online trading India clients have a reason to rejoice and below article is dedicated to all beginners, laymans and amateurs who will be graduating from the clutches of a broker to their personal online trading platforms which can range from Indiabulls, SBIcap, Angel Broking, HDFC securities, Vantage trade, ICICIdirect, Motilal Oswal, Sushil Finance, JM Finance, UTI securities, Sharekhan, 5 Paisa or India Infoline, Reliance money, Anand Rathi and Geojit, etc. Online trading acount free is at times a facility provided to new customers and do remember to check the brokerage charges. Also undertake the online trading demo before signing on that black dotted line.  Do undertake the brokerage charges in India comparison for these trading platforms and do read the fine print before signing on that black dotted line. Do keep a copy of the agreement you sign with them for future reference. Do check if they provid any free Online trading tips and check its accuracy. Also check their Online trading software platform and technology being used by them as it can make or mar your success in the stock market. Do not take the stock market as a Online trading game and do a diligence with all service providers and check the online trading SBI or online trading Motilal Oswal or online trading HDFC or online trading ICICIdirect platforms to arrive at a correct conclusion.

So far so good and now we go step by step for opening of an online trading account in any of these listed brokerage firms in India or so called brokerage houses. I hope the below article on online trading  sites will be able to answer all queries related to online trading account India queries. If still not satisfied yo can still search Google for more info by using either of the terms as listed and have been given in bold font.

Online trading acount comparison can be obtained on the site itself by googling the query from site itself and one will be able to get an answer to online trading account best in terms i.e. one will get an answer for queries like online trading account SBI or online trading acount ICICI or online trading acount HDFC.

Do remember to undertake the online trading acount opening with diligence and remember to cross check the online trading acount charges and also get the details for the same from online trading acount reviews.

ONLINE TRADING

1. Stock broking is one of the first industries in India where Internet has shown its vast potential. Online trading has helped to cut through sub broking intermediaries, push down transaction costs, bringing in transparency and thus has empowered the investor as a whole.

2. Erstwhile era of trading involved cries across the floor of the stock exchange to trade in paper shares which later on replaced with Demat trading.Demat Trading.

3. Demat trading means that shares are held in electronic form with depositories which are namely NSDL and CSDL. Demat trading was introduced in phased manner from 1999. Demat trading is a prelude to online trading. Dematerialization of all shares has provided a platform for online trading and today online trading has spread its wings to futures/derivatives trading in stock markets, investment in mutual funds, post office schemes, insurance, applying for initial public offer and commodity trading.
4. Benefits Online Trading.
(i) One is able to strike the price at one’s will as per individual convenience for place and time.
(ii) Intermediaries are removed.
(iii) Competitive brokerage.
(iv) Entry of female in male dominated area.
(v) One can trade live on stock exchange irrespective of location.

5. Requirement Online Trading.
(i) Internet.
(ii) Online trading account.
(iii) Knowledge of trading in stock market.

6. How to Open an Online Trading Account?
Following platforms exist where online trading account can be opened and prominent among these platform accounting for 70-80% of business are listed below :-
(i) ICICI Directdotcom (Owned by ICICI Group).
(ii) Indiabullsdotcom.
(iii) Sharekhandotcom (Owned by SSKI).
(iv) Kotak Securities (Owned by Kotak Mahindra Group).
(v) HDFC Securities (Owned by HDFC Bank).
(vi) 5 Paisadotcom (Owned by India Infoline.com).

7. Opening an Online Trading Account.
(i) Choosing an online trading account.
(ii) Submission of requisite document which requires residence proof, bank details and PAN Card.
(iii) Receipt of user ID and password.
(iv) Methods of transaction of funds.

How These Online Platform Operates.
8. After the account has been opened, user is all set to trade on internet The data in form of password and transaction password travels in 128 bit encryption mode and is safe to operate in internet.It has three parameters -trading account, bank account and demat account.

9. ICICI Direct and HDFCSEC has an inherent advantage where all the above are integrated and thus drawl of funds and credit of funds post purchase/sales of shares/other instruments occurs on its own. However, for buying purposes the user has to allocate upto which amount can be utilized for purchase of shares/ other instruments. However, major drawback with both of these is a high brokerage rate up to 0.85% per transaction for an average investor.

10. Sharekhan, Indiabull and 5paisa have tied up with various banks for credit/debit of funds however, instructions need to be given by the user for credit/debit of funds which may take up to 24 hours of execution.

11. Share/instruments which are either sold/purchased are credited in users demat account and thus restricts online platform from indulging in any malpractices.

Commodity Trading.

12. India being an agrarian economy thus a lot of potential exists for commodity trading. The term commodity future means that a retail investor is taking a position on a future price which may / may not favourable at the time of expiration of the contract. These prices are dynamic and can be changed by the minute. One can take same contract and move out when the going is not favourable.

13. These markets have two critical function to perform i.e. price discovery and price risk management.

14. ADVANTAGES.
(i) Producer can" get an idea of the price likely to prevail at a future point of time and can thus plan crop pattern.
(ii) Consumer gets an idea of future price and can thus plan his purchases.
(iii) Exporter gets an advance indication of likely price to prevail.

15. Disadvantages.
(i) Speed of internet.
(ii) Online frauds by hackers.
(iii) Non maintenance of secrecy of password by user leading to misuse.

Conclusion.

16. Online trading is increasingly drawing market share from the offline world and with Indian households investing less than 2% of their savings in shares and debentures and thus market of online trading is likely to expand by leaps and bounds with increase in penetration of internet in Indian household.

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