How Does Online Stock Trading Works in India?

Online Stock Trading in India

How Does Online Stock Trading Works in India?

For people who are into developing their own business, stock trading is a good option. Just imagine, if all you have to do the whole day is to sit back and watch as your money grows at an amount. It may sound like a dream to others but for those who think positively about engaging into stock trading, it can be done at the shortest possible time.

What are Stocks?

Stocks are your claims or assets in a company. It is your share in the business that you hold ownership. Continuously, as you acquire more stock, you are also earning an increase in your overall ownership stake. Equity, stock, and shares are all the same so you should be mistaken of them.

What is stock trading?

Before you even delve into trading stocks, you should know first what it is. Generally, stock trading is selling a stock agreed by company stakeholders. Once the stock is sold, it only means that you hold a share of it because you are a shareholder of the company. Stock ownership is your passes in getting your earnings back. This means that when you have a bigger share in the company, you will also receive greater earnings out of the selling price.

Types of Stock Trading

  • Offline Trading

Currently, a greater number of stocks are traded in the form of exchanges. Once a stock is on the exchange, both sellers and buyers can name their price on the meeting. As a stockholder, you have the right to receive your claims of the earnings of the company. During the 19th century, materializing certificates is your proof that you are indeed a stockholder. The certificate has a trademark of the company that serves as a document of proof. You can use the certificate to trade your share in any way you want.

  • Semi-online Trading

Stock trading can also be done through semi-online trading. In this way, you can call directly your prospective client or buyer. As easy as making a call, you can proceed with the transaction.

  • Complete Online

As advanced technologies take into action, stock trading can now be processed online. Look for any potential buyer or seller online that you can trust and you are on the go.

Current Trading Frameworks of Online Stock Trading in India

Online Stock Trading in India

  1. Stock Exchanges (NSE/BSE)

    • The institution executes the order of exchanges at a quoted price. They provide a list of quoted price on a particular day.

  2. Depositories (NSDL / CDSL)

    • The duty of depositories in India is comparable to banking entities. From time to time that a person decides to invest, they come into play. These people spearhead the dematerialization of shares and stocks.

  3. Clearing House

    • As a financial institution, the Clearing House clears and settles both commodities and financial services and transactions. Any of these transactions can be in a future or spot exchange.

  4. Regulator (SEBI)

    • In terms of the Indian capital market, SEBI holds complete control of its regulation. It has its own way of protecting the rights of investors in India.

  5. Stock Brokers

    • A stockbroker represents you to a client who wants to buy or sell a stock. They are actually registered representatives for this matter.

  6. Trader

    • Whether retail trader, proprietor or institution, they all deal with finance. They sell and buy stocks for commodities.

Securities Available for Trading in India

Secondary markets in India that deal with trading securities like equities,  ETF, equity derivative and index derivative which helps in segmenting the market and provide customization for investors and traders.

To Conclude 

Stock trading in India works in ways we cannot explain in exact. Yet, we can say that it is organized and secured, as there are agencies and institutions that handle all the concerns of both traders and investors.

Article Info

Published Date: November 27, 2016
Author: Valarmurugan

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