online share trading

Understand the workings of online share trading.

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Several investors today want to invest in fundamentally strong companies where their investments can grow substantially. So, all this is leading to an increase in the number of people participating in the online stock market. Several platforms are now providing such facilities. 

What is online share trading?

Online share trading refers to the buying and selling of security shares using online platforms. The platforms allow investors to buy and sell shares of stocks from their mobile phones and desktop computers. The depository participants (DPs), which are intermediaries between depositories and investors, provide demat accounts and trading accounts. They facilitate investing in the stock market. These financial institutions are taking advantage of technological advancements to curate platforms for the online stock market. Now, with an internet connection on the phone, one can trade from anywhere with the help of online share trading facilities. Participating in the online stock market is also easy and doesn’t require much time. 

Working in online share trading

Share trading involves buying shares of publicly listed companies on the stock exchanges. The goal here is to buy as cheaply as possible and then sell at a higher price to profit.This basic principle works even in an online stock market. The only thing that changes is how the operations involved in trading take place. Online share trading consists of the following integral processes: 

Opening of demat and trading accounts

The first step in the online stock market begins with opening online depository and trading accounts. A demat account holds the shares that were purchased on the stock market. It is a repository for our assets. The trading account enables us to place our orders to buy or sell these shares. For online share trading, investors need both of these essential investment accounts. DPs, also known as stockbrokers, provide demat and trading accounts. In return, they charge a fee for the services provided with the accounts. Opening demat and trading accounts online is quite convenient, as most brokers now facilitate online account opening. You can fill out the account opening form and complete the procedure on their online portals or online trading apps. 

Adding funds to trading accounts

To buy shares listed on stock exchanges, investors need to have sufficient funds in their trading accounts. As already mentioned, the trading account is where you will place your order to either buy or sell any asset. So, to make any kind of purchase, you must have the requisite amount of money to make the transaction. Investors can add funds to their trading accounts online through a suitable means of their choice. One can use his debit card, credit card, online net banking facility, or UPI to add funds to his or her trading account. Adding money to your trading account takes you a step closer to completing the online share trading procedure. 

Placing the bids

Placing orders to purchase or sell a security is also referred to as “making a bid.” The price at which we wish to execute the order is called the “bid” or “ask” price. After adding the required money to our trading account, we must place the order to make our transactions. However, investors should decide which shares they want to buy or sell. There are numerous stocks in the stock market. In the online stock market, spot the appropriate stocks to invest in. Learn the fundamentals of stock trading, fix your financial goals, and create a trading strategy. Based upon these factors, choose the stocks to buy. Then, specify the quantity and make the requisite payment. Here again, investors can use their preferred mode of payment. Finally, confirm the order and click “place order.” The stock exchange will then receive the order. 

Remit or debit shares

Upon placing orders, the stock exchanges find a suitable match for them. When a perfect match is available, the exchange proceeds with the transaction. Those buying shares shall receive them in their respective demat accounts. It takes around two trading days to transfer shares into one’s demat account. This takes “t + 2” trading days. If a trader sells any shares he owns, they get debited from his demat account. These shares go to the trader who made the bid to purchase them. 

Conclusion

The online stock market is very advantageous because investors can trade through platforms working on mobile devices and PCs. All share trading operations, including buying and selling shares, happen online on these platforms. Moreover, the advent of sophisticated apps and web-based trading portals revolutionised online share trading in the stock market. Reputable firms such as Share India are offering high-tech platforms for flawless trading. The feature-packed platform provides access to all the essential trading tools that aid online trading. As a result, anyone with a smartphone can easily begin online trading. 

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