an easier case.
Consequently, in 1996, the Indian parliament passed the Derivatives Act, which allowed for online stock trading, thereby facilitating the broker and the investor.
In the new online trading system, an investor must open a demat account with one of the stock brokers to begin trading online.
A demat account is a must for an investor to negotiate online.
Mentioned below are some of the advantages of online trading:
1) Easier and convenient way to own shares
3) Zero stamp duty on the transfer of shares
4) Safer than paper, for example, false signatures, delays, robberies, etc.
5) Small paperwork for transfer of securities
6) Less transaction costs
7) There are no "strange" problems. Even a single action can be sold.
8) DP records a change of address with all companies. There is no need for the investor to contact the companies immediately.
9) DP transmission of securities, thus eliminating the need to notify companies.
10) Automatic credit in demat accounts
11) Capital and debt instruments may be held by a demat account
The deposit system assists in the reduction of expenses due to lower printing and distribution costs. It increases the efficiency of registrars and transfer agents and the secretariat of a company. It provides better facilities for timely communication and service to shareholders and investors.
The disadvantages of online trading are mentioned below:
1) Investors, who are trading for the first time, go with the flow and get immersed in technology and actually forget about temporarily that they are actually using their real money.
2) There is no mentor relationship between a professional broker and an online trading account holder, thus leaving the investor alone to make choices of the right actions.
3) Users who are not familiar with the pros and cons of brokerage software basics can make mistakes that can prove to be an expensive affair.
4) This is just like any other financial strategy where your commitment to online trading takes research and dedication to ensure that you're okay. You have to take the time to do your own research where you will have to overcome a great learning curve to make money with online trading.
Source by Vaibhav Bhadange