What is online trading in securities?
Online trading in securities refers to the facility of investor being able to place his own orders using the internet trading platform offered by the trading member viz., the broker. The orders so placed by the investor using internet would be routed through the trading member.
How to open an online trading account?
You have to short list a broker and visit his office. Account opening includes doing a KYC, and if you have a demat account and a savings bank account your account will be activated and you could start trading / investing.
How online trading is different from offline trading?
Not very different. In offline trading you would be placing the orders on telephone or by physically going to the broker’s office. In an online trading platform you place the order on the broker’s system – which is then placed in the market. The chances of making mistakes are higher in online for a customer not very experienced in using technology and in understanding how markets work. So first learn with small trades, and preferably going to a branch.
What are safety measures an online investor must know?
Investor has to take care that:
1. The Default password provided by the broker is changed before placing of order.
Ensure that password is not shared with others. Change password at periodic interval.
2. He has understood the manner in which the online trading software has to be
3. He has received adequate training on usage of software
4. The system has facility for order and trade confirmation after placing the orders
What are the documents required to open an online trading account?
The same documents that are required when a person does a Kyc. Residence proof, PAN – are mandatory. One photograph and an agreement between you and the broker – to be executed on a stamped paper. Once all these papers are in place an account is opened within 3 working days.
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