New Institutions Of Online Trading
The current online trading industry is in upheaval. This is in large part due to the down turn in stock prices and its gradual clawing back at the whim of the global economic crisis. People are looking for a change and don’t want to pay exuberant brokerage fees to trade online. That is where the new wave of online brokers comes into the fold. Many of the new brokerage institutions that specialise in online trading have disposed of the outdated methods that were employed by brokers in the past. Many have turned to a flat fee based on the amount you intend trading. New brokers are also offering a relatively new trend in the industry known as Straight Through Processing (STP).
This negates the need of slow manual processing methodology. It ensures that your trade goes straight through to the market and ensures you get the best price for the stocks you want. Manual processing was often slow and by the time the broker had collated all of the orders for a specific stock – the stock had lost (good for the buyer) or gained points (bad for the buyer). This can also be a curse in that because of the speed of the transaction you will have no time to actually change your order to best suit your requirements. STP puts a little more power into the hands of the buyer rather than the broker. However, it is important that you do not make any mistakes in the order.
Don’t be afraid to utilise the services of a new brokerage institution. You can save yourself thousands of dollars in fees over the course of your share trading career. Because online trading is a relatively new method of conducting share trades; it may be in your best interest to use a new service that is competitive and innovative.
This negates the need of slow manual processing methodology. It ensures that your trade goes straight through to the market and ensures you get the best price for the stocks you want. Manual processing was often slow and by the time the broker had collated all of the orders for a specific stock – the stock had lost (good for the buyer) or gained points (bad for the buyer). This can also be a curse in that because of the speed of the transaction you will have no time to actually change your order to best suit your requirements. STP puts a little more power into the hands of the buyer rather than the broker. However, it is important that you do not make any mistakes in the order.
Don’t be afraid to utilise the services of a new brokerage institution. You can save yourself thousands of dollars in fees over the course of your share trading career. Because online trading is a relatively new method of conducting share trades; it may be in your best interest to use a new service that is competitive and innovative.
Advantages Of Online Trading
Trading stocks online has a bevy of advantages (and disadvantages). Advantages include being able to check your stock portfolio anywhere as long as you have an Internet connection, absolute control over your portfolio, access to up-to-date information, competitive fee structures and the ability to access different markets. Even if you don’t have access to a computer at your finger tips while you are travelling; you can always use a cell phone. Online trading can give you accurate data on how different stocks are performing so you never have to miss a bargain.
Because online trading is such a massive market there is a lot of competition between brokers to get your business. Brokers are constantly out doing each other in the form of fee reductions, extra functionality and conglomerating services into a single access point. Instead of chasing data when attempting to make an informed decision you can just go to a single place to get all of the information you need. Some online brokerage services even send you messages to your cell phone that warns you of when may be a good time to buy or sell particular stocks. If you have a smart phone you make the transaction the second you receive the message.
The competition between brokers is not the only advantage of having multiple brokers available to serve you. It is also a massive source of information in itself. You can get real advice from multiple sources. Because of the inherent fluctuations in stock prices that can change within minutes – having people who cast a human eye over the data to ensure that their own information is up to date can mean the difference between purchasing a stock that will never recover and purchasing a stock that may double in value over the course of a day.
Because online trading is such a massive market there is a lot of competition between brokers to get your business. Brokers are constantly out doing each other in the form of fee reductions, extra functionality and conglomerating services into a single access point. Instead of chasing data when attempting to make an informed decision you can just go to a single place to get all of the information you need. Some online brokerage services even send you messages to your cell phone that warns you of when may be a good time to buy or sell particular stocks. If you have a smart phone you make the transaction the second you receive the message.
The competition between brokers is not the only advantage of having multiple brokers available to serve you. It is also a massive source of information in itself. You can get real advice from multiple sources. Because of the inherent fluctuations in stock prices that can change within minutes – having people who cast a human eye over the data to ensure that their own information is up to date can mean the difference between purchasing a stock that will never recover and purchasing a stock that may double in value over the course of a day.
Disavantages Of Online Trading
Online trading is a high risk business. However the risk is commensurate with the eventual monetary gains. Risks associated with online trading are relevant to those you can control, the economic climate and the specific business that you have invested in. If the business you have invested in suddenly announces record losses then there is a good chance your money will have halved (or worse). The current economic climate is a good indicator of how stocks fluctuate based upon the financial situation of the planet. Whilst trading online may be an easy way to buy stocks – it is this simplicity that can land you in hot water.
Because it is so easy to purchase stocks online; it is too easy to over commit. If you think a stock is at the right price to buy then you might get carried away and spend a lot more money than you would have otherwise. This is another thing that is a disadvantage when trading online – you don’t have a support network or advisors letting you know when to buy or sell. You are alone (for the most part). It is too easy to make a poor decision which leads to an eventual loss rather than gain. If a business that you have invested in has no chance of recovering fiscally then you have no chance of making back your money.
You are also at the whim of your broker. Some brokers require a minimum purchase before they will enable you to purchase stocks. They are also expensive to employ. Their pay is not based on how well the stocks are performing – they get paid either way. This is why they are more than happy to allow you to make decisions for yourself rather than giving you proper guidance. Some brokers even go as far as charging you for not trading enough.
Because it is so easy to purchase stocks online; it is too easy to over commit. If you think a stock is at the right price to buy then you might get carried away and spend a lot more money than you would have otherwise. This is another thing that is a disadvantage when trading online – you don’t have a support network or advisors letting you know when to buy or sell. You are alone (for the most part). It is too easy to make a poor decision which leads to an eventual loss rather than gain. If a business that you have invested in has no chance of recovering fiscally then you have no chance of making back your money.
You are also at the whim of your broker. Some brokers require a minimum purchase before they will enable you to purchase stocks. They are also expensive to employ. Their pay is not based on how well the stocks are performing – they get paid either way. This is why they are more than happy to allow you to make decisions for yourself rather than giving you proper guidance. Some brokers even go as far as charging you for not trading enough.
Online Trading Types
1) Online Currency Trading:
With the world economy being unstable the currencies of respective countries of the world have also been unstable thereby promoting investors and traders to trade in currency. Currency trading or Forex trading is the trading of the currency of any currency. For example if we were to consider the rupee vs dollar comparison. Assuming a standard value of an American dollar being equivalent to forty Indian rupees. If the value falls below forty rupees then the rupee is said to have appreciated as against the dollar and the dollar is said to have depreciated in value.
If the exchange rate between the rupee and the American dollar falls then the rupee is said to have depreciated against the American dollar. The Indian rupee is said to have become weak. A weaker rupee is good for companies that are into importing where as a stronger rupee is strong for the exporters. Not just the American dollar, there are several other currencies which are traded on the currency market every day like the Euro, yen, yuan, pound, American dollar etc. These currencies are regarded to be stable currencies as they have been able to withstand their value over the years. Hence they are ones which are traded the maximum in.
Now you can even do currency trading online. Currency trading does not have any other specific requirements. Millions of net worth in value is traded across the currency trading exchange every single day. And with the variations in the value of the currency of a country increasing then currency trading on that currency will surely start.
2) Online BSE Trading:
The Bombay stock exchange is one of the largest and the oldest stock exchanges in the country. Located at Dalal street in southern Mumbai, this stock exchange has attracted millions of investors. The Bombay stock exchange is also referred to as the sensex. The sensex is the weighted average of the stock prices of 30 companies. These companies are from various industries like Banking, IT, power etc. The sensex is a general representative of how the stocks are moving on the bombay stock exchange and what is the market sentiment at that time.
The Bombay stock exchange provides online trading through a popular facility known as the BOLT (The Bombay stock exchange on line trading) platform. Earlier when an investor used to buy the shares of a company, he used to get a certificate where as now since all the transaction happens online, h e does not get such a certificate. On the BSE you can trade in any stock of a company that is listed with the Bombay Stock exchange. Remember when ever trading you should use a registered broker to carry out the operations. You should make sure that the broker is registered with the SEBI that is the Securities and exchange board of India and the BSE.
There are in all nine hundred plus trading members associated with BSE which provide trading in over 4500 equities as well as 1400 debt securities. It also provide a trading platform for traders and investors in derivative instruments like index futures, index options, stock futures and stock options.
3) Online Share Trading:
There are several online web sites that offer you to trade in shares online. These web sites are just like your brokers who help you in your transaction and take a small brokerage fee for the same. If you are looking forward to trading shares at the National stock exchange, Bombay stock exchange then you can create a demat account and then choose one of the online brokerages which suit you. Now you can get started with online share trading. Gone are the days when you had to individually go to the broker or give him a call now the authority of buying or selling the shares is in your hands.
And you can choose to buy or sell shares online as and when you want. Online share trading is a real time process. So you can keep checking the stock price and then can decide when you want to buy or sell it. Online share trading can be done on various stock exchanges present all over the country. There are a large number of web sites that offer you the chance to trade in shares. You have to create an account on these web sites before you actually begin trading in shares.
Once you have created an account for online trading, you can buy or sell the shares of a certain company or stock as per your wish and convenience. You can keep a track of the daily happenings in the market as well as any other news related to the company whose stock you wish to buy or sell and then perform the necessary transaction bases on your discretion.
4) Online Day Trading:
Day trading is a recent concept that came up in trading but has become hugely popular. The market is a very volatile place and you can never really be very sure of how the market is going to react. Whether there is going to be a rally or a slump. And hence traders who trade through a day and through a day only are referred to as Day traders. Day trading is the concept where by investors and traders enter the market in the mornings and exit it before the end of the day that is before the closure of the market for that day.
Since they enter and exit on the same day, they keep a close look out for stocks which are behaving very well on a particular day. Hence day traders do not look at stocks or commodities or the currency from a long term perspective but are interested in how a particular stock or stocks are going to perform on that particular day and hence what can be the results associated with that stock.
Day traders follow the news developments strongly and may buy or sell as soon as they get a sense that the market may tend to change. Day traders do not thus depend upon the vagaries of the stock market. They are able to exit every day before the closure of the sensex market and hence in some cases they are able to make their losses less or make themselves less vulnerable to any variations that may affect the stock markets thereby increasing their chances of making more profits.
5) Online commodity Traning:
Commodities can be of several types like energies, meats, grains, financials etc. Trading in commodities, stands today as a very lucrative profession. The exchanges in India that allow you to trade in commodities are the following,
• Bhatinda Oil Exchange Ltd. (Bhatinda)
• The Bombay Commodity Exchange Ltd. (Mumbai)
• The Rajkot Seed oil & Bullion Merchants` Association Ltd (Rajkot)
• The Kanpur Commodity Exchange Ltd. (Kanpur)
• The Meerut Agro Commodities Exchange Co. Ltd. (Meerut)
• The Spices and Oilseeds Exchange Ltd. (Agra)
• Ahmedabad Commodity Exchange Ltd. (Ahmedabad)
• Vijay Beopar Chamber Ltd. (Muzaffarnagar)
• India Pepper & Spice Trade Association. (Kochi)
• Rajdhani Oils and Oilseeds Exchange Ltd. (Delhi)
• National Board of Trade. (Indore).
• The Chamber Of Commerce, (Hapur)
• The East India Cotton Association (Mumbai).
• The Central India Commercial Exchange Ltd. (Gwalior)
• The East India Jute & Hessian Exchange Ltd (Assam)
• First Commodity Exchange of India Ltd (Kochi)
• Bikaner Commodity Exchange Ltd. (Bikaner)
• The Coffee Futures Exchange India Ltd. (Bangalore)
• E-sugar India Limited.
• National Multi Commodity Exchange of India Limited.
• Surendranagar Cotton oil & Oilseeds Association Ltd,
• Multi Commodity Exchange of India Ltd.
• National Commodity & Derivatives Exchange Ltd.
• Haryana Commodities Ltd. (Hissar)
• e-Commodities Ltd.
The major indices for commodity trading are MCX, NCDEX and NMCE. MCX is the largest index as it involves a huge volume of trading. More details about MCX and NCDEX are given below on the following web sites. These web sites will offer you all the information relating to the various commodities which are traded on these exchanges.
www.mcxindia.com/
http://www.ncdex.com/aboutus/index.aspx
6) Online NSE Trading:
The National stock exchange or the NSE is one of the biggest stock exchanges in the country. Situated in the capital city of Delhi, it has thousands of investors trading on the national stock exchange every single hour. Most of the big companies in the country are listed on the national stock exchange and hence investor can invest as well as trade in them.
The national stock exchange has its own web site which investors can visit in order to find if a specific company is listed on it or not. You can also find any other information relating to investing in companies which are listed on the NSE.
The web site of the Nifty or the national stock exchange is www.nse-india.com/.
There are more than 850 companies listed on the NSE on which investors can invest in. You can do online trading on the national stock exchange through any of the brokerages that you want to. There are several online brokers and portals as well through which you can do online trading.
There are in all 850 trading members associated with NSE which provide trading in over 1000 equities 2500 debt securities. It also provide trading platform in derivative instruments like index futures, index options, stock futures and stock options. The National stock exchange provides an on line trading facility for its investors as well as traders. This trading facility is called National Exchange for Automated Trading (NEAT). It is similar to the facility offered by the Bombay stock exchange referred to as the BOLT.
7) Online Futures Trading:
In the case of futures trading there is generally a contract between one or more parties with respect to when an underlying asset will be bought or sold. The contract generally refers to a time in the future when the asset will be sold at that price. The futures contract will thus have the quantity of the asset, the place where the asset will be sold, the price at which it will be sold and the time at which it will be sold. All futures trading takes place on the futures index. The futures index is the index on which this futures trading occurs. The futures index is thus different from a normal index.
The date mentioned in the futures contract is referred to as the expiration date and indicates the date on which the particular asset might be sold or bought. The futures price will be the price at which this futures contract is going to trade in the futures market. The official price for the futures contract being traded at for that particular day is called as the settlement price of that futures contract for that particular day.
There is a distinction between the futures contract and the forwards contract which must be noted. The futures contracts are traded on the exchange where as the forwards contract is traded over the counter. And the futures contracts are margined where as the forwards contracts are not. Hence the futures contracts have a lesser element of credit risk as opposed to forwards contracts. Futures trading can be done by prospective traders on an online platform.
With the world economy being unstable the currencies of respective countries of the world have also been unstable thereby promoting investors and traders to trade in currency. Currency trading or Forex trading is the trading of the currency of any currency. For example if we were to consider the rupee vs dollar comparison. Assuming a standard value of an American dollar being equivalent to forty Indian rupees. If the value falls below forty rupees then the rupee is said to have appreciated as against the dollar and the dollar is said to have depreciated in value.
If the exchange rate between the rupee and the American dollar falls then the rupee is said to have depreciated against the American dollar. The Indian rupee is said to have become weak. A weaker rupee is good for companies that are into importing where as a stronger rupee is strong for the exporters. Not just the American dollar, there are several other currencies which are traded on the currency market every day like the Euro, yen, yuan, pound, American dollar etc. These currencies are regarded to be stable currencies as they have been able to withstand their value over the years. Hence they are ones which are traded the maximum in.
Now you can even do currency trading online. Currency trading does not have any other specific requirements. Millions of net worth in value is traded across the currency trading exchange every single day. And with the variations in the value of the currency of a country increasing then currency trading on that currency will surely start.
2) Online BSE Trading:
The Bombay stock exchange is one of the largest and the oldest stock exchanges in the country. Located at Dalal street in southern Mumbai, this stock exchange has attracted millions of investors. The Bombay stock exchange is also referred to as the sensex. The sensex is the weighted average of the stock prices of 30 companies. These companies are from various industries like Banking, IT, power etc. The sensex is a general representative of how the stocks are moving on the bombay stock exchange and what is the market sentiment at that time.
The Bombay stock exchange provides online trading through a popular facility known as the BOLT (The Bombay stock exchange on line trading) platform. Earlier when an investor used to buy the shares of a company, he used to get a certificate where as now since all the transaction happens online, h e does not get such a certificate. On the BSE you can trade in any stock of a company that is listed with the Bombay Stock exchange. Remember when ever trading you should use a registered broker to carry out the operations. You should make sure that the broker is registered with the SEBI that is the Securities and exchange board of India and the BSE.
There are in all nine hundred plus trading members associated with BSE which provide trading in over 4500 equities as well as 1400 debt securities. It also provide a trading platform for traders and investors in derivative instruments like index futures, index options, stock futures and stock options.
3) Online Share Trading:
There are several online web sites that offer you to trade in shares online. These web sites are just like your brokers who help you in your transaction and take a small brokerage fee for the same. If you are looking forward to trading shares at the National stock exchange, Bombay stock exchange then you can create a demat account and then choose one of the online brokerages which suit you. Now you can get started with online share trading. Gone are the days when you had to individually go to the broker or give him a call now the authority of buying or selling the shares is in your hands.
And you can choose to buy or sell shares online as and when you want. Online share trading is a real time process. So you can keep checking the stock price and then can decide when you want to buy or sell it. Online share trading can be done on various stock exchanges present all over the country. There are a large number of web sites that offer you the chance to trade in shares. You have to create an account on these web sites before you actually begin trading in shares.
Once you have created an account for online trading, you can buy or sell the shares of a certain company or stock as per your wish and convenience. You can keep a track of the daily happenings in the market as well as any other news related to the company whose stock you wish to buy or sell and then perform the necessary transaction bases on your discretion.
4) Online Day Trading:
Day trading is a recent concept that came up in trading but has become hugely popular. The market is a very volatile place and you can never really be very sure of how the market is going to react. Whether there is going to be a rally or a slump. And hence traders who trade through a day and through a day only are referred to as Day traders. Day trading is the concept where by investors and traders enter the market in the mornings and exit it before the end of the day that is before the closure of the market for that day.
Since they enter and exit on the same day, they keep a close look out for stocks which are behaving very well on a particular day. Hence day traders do not look at stocks or commodities or the currency from a long term perspective but are interested in how a particular stock or stocks are going to perform on that particular day and hence what can be the results associated with that stock.
Day traders follow the news developments strongly and may buy or sell as soon as they get a sense that the market may tend to change. Day traders do not thus depend upon the vagaries of the stock market. They are able to exit every day before the closure of the sensex market and hence in some cases they are able to make their losses less or make themselves less vulnerable to any variations that may affect the stock markets thereby increasing their chances of making more profits.
5) Online commodity Traning:
Commodities can be of several types like energies, meats, grains, financials etc. Trading in commodities, stands today as a very lucrative profession. The exchanges in India that allow you to trade in commodities are the following,
• Bhatinda Oil Exchange Ltd. (Bhatinda)
• The Bombay Commodity Exchange Ltd. (Mumbai)
• The Rajkot Seed oil & Bullion Merchants` Association Ltd (Rajkot)
• The Kanpur Commodity Exchange Ltd. (Kanpur)
• The Meerut Agro Commodities Exchange Co. Ltd. (Meerut)
• The Spices and Oilseeds Exchange Ltd. (Agra)
• Ahmedabad Commodity Exchange Ltd. (Ahmedabad)
• Vijay Beopar Chamber Ltd. (Muzaffarnagar)
• India Pepper & Spice Trade Association. (Kochi)
• Rajdhani Oils and Oilseeds Exchange Ltd. (Delhi)
• National Board of Trade. (Indore).
• The Chamber Of Commerce, (Hapur)
• The East India Cotton Association (Mumbai).
• The Central India Commercial Exchange Ltd. (Gwalior)
• The East India Jute & Hessian Exchange Ltd (Assam)
• First Commodity Exchange of India Ltd (Kochi)
• Bikaner Commodity Exchange Ltd. (Bikaner)
• The Coffee Futures Exchange India Ltd. (Bangalore)
• E-sugar India Limited.
• National Multi Commodity Exchange of India Limited.
• Surendranagar Cotton oil & Oilseeds Association Ltd,
• Multi Commodity Exchange of India Ltd.
• National Commodity & Derivatives Exchange Ltd.
• Haryana Commodities Ltd. (Hissar)
• e-Commodities Ltd.
The major indices for commodity trading are MCX, NCDEX and NMCE. MCX is the largest index as it involves a huge volume of trading. More details about MCX and NCDEX are given below on the following web sites. These web sites will offer you all the information relating to the various commodities which are traded on these exchanges.
www.mcxindia.com/
http://www.ncdex.com/aboutus/index.aspx
6) Online NSE Trading:
The National stock exchange or the NSE is one of the biggest stock exchanges in the country. Situated in the capital city of Delhi, it has thousands of investors trading on the national stock exchange every single hour. Most of the big companies in the country are listed on the national stock exchange and hence investor can invest as well as trade in them.
The national stock exchange has its own web site which investors can visit in order to find if a specific company is listed on it or not. You can also find any other information relating to investing in companies which are listed on the NSE.
The web site of the Nifty or the national stock exchange is www.nse-india.com/.
There are more than 850 companies listed on the NSE on which investors can invest in. You can do online trading on the national stock exchange through any of the brokerages that you want to. There are several online brokers and portals as well through which you can do online trading.
There are in all 850 trading members associated with NSE which provide trading in over 1000 equities 2500 debt securities. It also provide trading platform in derivative instruments like index futures, index options, stock futures and stock options. The National stock exchange provides an on line trading facility for its investors as well as traders. This trading facility is called National Exchange for Automated Trading (NEAT). It is similar to the facility offered by the Bombay stock exchange referred to as the BOLT.
7) Online Futures Trading:
In the case of futures trading there is generally a contract between one or more parties with respect to when an underlying asset will be bought or sold. The contract generally refers to a time in the future when the asset will be sold at that price. The futures contract will thus have the quantity of the asset, the place where the asset will be sold, the price at which it will be sold and the time at which it will be sold. All futures trading takes place on the futures index. The futures index is the index on which this futures trading occurs. The futures index is thus different from a normal index.
The date mentioned in the futures contract is referred to as the expiration date and indicates the date on which the particular asset might be sold or bought. The futures price will be the price at which this futures contract is going to trade in the futures market. The official price for the futures contract being traded at for that particular day is called as the settlement price of that futures contract for that particular day.
There is a distinction between the futures contract and the forwards contract which must be noted. The futures contracts are traded on the exchange where as the forwards contract is traded over the counter. And the futures contracts are margined where as the forwards contracts are not. Hence the futures contracts have a lesser element of credit risk as opposed to forwards contracts. Futures trading can be done by prospective traders on an online platform.
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