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What is online trading?


When an online platform provides the facility to buy or sell financial products such as stocks, mutual funds, bonds or derivatives, it is called online trading. It couldn't be easier than this. In every way, online trading is like logging on to Amazon or Flipkart and buying stuff.

All you need is internet, mobile or laptop and some money to do business. That's it. You can trade from anywhere and whenever you want. This, my friends, is the essence of online trading.

To understand what online trading is, undoubtedly, you should read about how online trading is done, advantages and disadvantages of online trading and its types. Keep reading further and clear all your doubts.

Benefits Of Online Trading 

  • Online trading is the easiest way to buy and sell stocks.
  • Traders can track the market and their trades in real time.
  • A wide range of instruments are available on a single trading platform. For example, trading in stocks and buying gold bonds or mutual funds can be done on the same platform.
  • You can do business online from anywhere and at any time.

Disadvantages Of Online Trading

  • Online trading platforms are prone to technical glitches during highly volatile days.
  • It may take some time for beginners to get familiar with advanced trading platforms.

How To Do Online Trading? 

  • Step 1: Open a Demat and trading account by approaching a SEBI-registered broker. You can open an account by submitting certain documents like PAN, Aadhaar card, a canceled cheque, six months bank statement and passport size photograph.
  • Step 2: Once the account is opened, you need to transfer funds from your bank account to the trading account.
  • Step 3: Now you can start trading online.


Online Trading Types

We have classified online trading into 3 types:

  • Quick Trades : Scalping and Intraday Trading
  • Positional Trades
  • Investing : Share Investment and Mutual Fund Investment

Quick Trade

Scalping

In scalping, trades are taken only for several seconds to minutes, this strategy is mainly used in high volatile stocks to capture as much volatility in the prices as possible. This is often referred to as micro-trading. Traders involved in scalping execute hundreds of trades in a day.

Scalping comes under a very high risk category and requires a good amount of experience and expertise in the stock markets. You can do scalping with a small amount of money through leverage.

Intraday Trading

As the name suggests, intraday trading is basically buying and selling of shares in a single day. It is also known as day trading. The holding time in intraday trading can range from one minute to hours. Usually, intraday trading is done on the basis of technical analysis and news or events.

Intraday trading also comes under very high risk category and requires some expertise in the stock market. You can trade intraday with small amount through leverage.

Learn everything about intraday trading here.

Positional Trades

If you hold a stock for more than a day then it is called positional trading. It is based on the idea that a stock's value will increase over a period of several days to months. Here traders follow a trend and wait for it to reach its peak.

Positional trading can be further classified into swing trading, which is again a trend following strategy, but popularly called for holding periods of several weeks.

Positional trading comes under the medium risk category and requires more capital as you need to pay the full amount for the shares you buy.

Investing

When you buy shares to hold them for several months or years, it is called investment. Investment can be made in shares or mutual funds.

While investing in stocks falls under the medium-risk category, mutual funds are considered to be a low-risk instrument.

Best Company Offering Online Trading In India

There are two types of brokers, a discount broker and a full-service broker.

A discount broker provides you trading and investment services at the lowest possible cost and a full-service broker provides fully fledged services such as investment tips, hand-holding, trading reports etc., but all these services with a higher cost Come

Well, AliceBlue is an exception! We provide the services of a full-service broker but at the cost of a discount broker. Meaning, we charge the lowest brokerage, yet provide full fledged services like a full-service broker.

Top Benefits Of Alice Blue

Unique Services

To further ease your trading experience, we offer a single account for equity and commodity exchange and also offer two unique products:

  1. Trade School:  It is a stock market education platform that helps you learn everything about stock markets from beginner to advanced level through webinars, live sessions, courses etc. from top traders and investors in India.
  2. Trade Store:  It is a marketplace that offers amazing apps that will ease your trading and investing experience in the stock market. The Trade Store has over 15-20 products that can be accessed freely or at a special price if you are an AliceBlue client.

Here's how Trade Store can help you in your trading and investment journey:

  • You can invest in mutual funds with direct mutual fund investment i.e. zero commission.
  • Invest in IPO with one click through UPI
  • Separate option trading platform with readymade strategies
  • Buy and sell signal software with 70 – 90% accuracy
  • Stock screeners and market sentiment analyzer for better decision making
  • Predefined technical and fundamental analysis strategies
  • advice, and much more.

Brokerage 

We offer two brokerage plans:

  • Trade Pro Plan:  Offers higher margin with slightly higher brokerage.
  • Freedom 15 Plan : Offers good margin with lowest brokerage in the industry.

List of Fees

SegmentsBrokerage
EQ Intraday(NSE, BSE)₹ 15 per order or 0.05%, whichever is lower
EQ Delivery(NSE, BSE)0
FUT(NSE, BSE)₹ 15 per order or 0.05%, whichever is lower
OPTION(NSE, BSE)₹ 15 per Order
FUT(MCX)₹ 15 per order or 0.05%, whichever is lower
OPTION(MCX)₹ 15 per Order
CURRENCY FUT(NSE, BSE)₹ 15 per order or 0.05%, whichever is lower
CURRENCY OPT(NSE, BSE)₹ 15 per order
NOTE*:Bracket Order charges are applicable at Rs. 4+GST on every executed order

To understand the clear difference between the two schemes, let us see an example: Suppose you buy shares worth ₹5 lakh.

 trade pro planFreedom 15 Plan
equity delivery₹ 500 (₹ 5,00,000 x 0.1%)₹ 0
equity intraday₹ 50 (₹ 5,00,000 x 0.01%)Max ₹15 per order

Margin

SegmentCNC/NRMLMISCOBO
NSE CASH NIFTY 50 STOCKSMAX 5X /(APPLICABLE+VAR+ELM)MAX 5X /(APPLICABLE+VAR+ELM)THATMAX 5X /(APPLICABLE+VAR+ELM)
NSE/BSE CASH A GROUP STOCKSMAX 5X /(APPLICABLE+VAR+ELM)MAX 5X /(APPLICABLE+VAR+ELM)THATMAX 5X /(APPLICABLE+VAR+ELM)
NSE/BSE CASH OTHER GROUP1X TIMESTHATTHATTHAT
NSE FUT NIFTY-50 STOCKSAS PER SPAN+EXPOSURE MARGINAS PER SPAN+EXPOSURE MARGINAS PER SPAN+EXPOSURE MARGINAS PER SPAN+EXPOSURE MARGIN
NSE FUT OTHER STOCKSAS PER SPAN+EXPOSURE MARGINAS PER SPAN+EXPOSURE MARGINAS PER SPAN+EXPOSURE MARGINAS PER SPAN+EXPOSURE MARGIN
NSE INDEX OPTIONS BUYAS PER PREMIUMAS PER PREMIUMTHATTHAT
NSE INDEX OPTIONS SELLAS PER SPAN+EXPOSURE MARGINAS PER SPAN+EXPOSURE MARGINTHATTHAT
MCXAS PER SPAN+EXPOSURE MARGINAS PER SPAN+EXPOSURE MARGINAS PER SPAN+EXPOSURE MARGINAS PER SPAN+EXPOSURE MARGIN
CURRENCYAS PER SPAN+EXPOSURE MARGINAS PER SPAN+EXPOSURE MARGINTHATTHAT

Here's how margin works:

Say you have ₹10,000 in your trading account, you can buy stocks worth ₹50,000 if you are doing intraday trading using bracket orders.

Calculation: ₹10,000 x 5 times = ₹50,000

Check out this page for daily margin insights.

Trading Platform 

We provide the most reliable and secure trading platform with amazing features:

  1. Web-based Application:  ANT Web
  2. Mobile Application:  ANT Mobi

All these trading platforms are very easy to use and provide over 1 year of historical chart data, 80+ technical indicators, multiple watchlists and lots of advanced features.

Overall, you get the benefits of a full-service broker at the cost of a discount broker!

Open your account now!

Quick Summary

  • Online business is what comes closest to online gaming – a joyride with money involved.
  • All you need to do is open a trading and demat account, transfer money from your bank account and start trading.
  • Scalping and intraday trading involves a lot of risk but can be done with a small amount of leverage.
  • Position trading is a bit risky and also requires more capital as you need to pay the full amount for the shares you buy.
  • When you buy shares to hold them for several months or years, it is called investment.
  • Investing in mutual funds is quite convenient and can be done with small amounts on a monthly basis.

FAQ (Frequently Asked Questions)

Is Online Trading Safe In India?

Online trading in India is absolutely safe. It is similar to any online transaction you do. Additionally, all transactions are scrutinized by the stock exchange and SEBI itself. This makes the overall process really secure.

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