Online Share Trading: Types and Benefits
Did you know that investors had to physically visit stockbrokers to buy and sell shares a few decades back? The new-age investors will find it hard to digest. Modern digital technology has made things easier and more accessible, including share market investing.
With just a few clicks on the computer screen or taps on your mobile screen, you are ready to invest. Online share trading is a boon for anyone who wants to invest in the stock market and taste the exponential increase. Let’s dive deep into the different types of online share trading and their benefits.
Types of Online Share Trading
Online share trading simply refers to the process of buying and selling securities through online platforms. Having a demat account is the key to indulging in online trading activities. When it comes to online trading, investors have various options based on their investment style, risk tolerance, and financial goals. Opening an online trading account with a reliable firm is vital. Here we will explore four common types of online trading.
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Intraday Trading
Intraday trading is one of the most popular types of online trading. It is also known as day trading, which involves buying and selling shares within the same trading day. Intraday trading aims to take advantage of short-term price movements to generate profits quickly. Intraday trading requires a comprehensive understanding of the stock market, technical analysis, and risk management.
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Short Selling
Short selling is a type of online trading where investors sell stocks they do not own. It might seem puzzling in the first instance. However, it is totally possible. Investors indulge in this trading, hoping that the stock price will decrease. It will allow them to buy back shares at a lower price and book a profit. Short selling is a popular strategy among experienced investors with a high-risk tolerance and confidence in their ability to predict the market.
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Delivery Trading
Delivery trading takes a long-term approach to investing in the stock market. It involves buying and holding shares for an extended period, usually more than one day. Delivery trading aims to benefit from long-term price appreciation and receive dividends. It’s a low-risk strategy for investors looking to earn a steady source of income.
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BTST Trading
Buy Today Sell Tomorrow (BTST) trading involves buying shares on one trading day and selling them the next trading day. BTST trading aims to benefit from short-term price movements and generate profits quickly. BTST trading is a popular strategy among investors who do not want to hold onto their investments for an extended period.
Benefits of Online Share Trading
There are numerous benefits of online share trading. Here are some popular ones.
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Convenience
Online share trading allows investors to buy and sell shares from the comfort of their place. They can access their trading accounts 24/7 and make trades at any time of the day or night. This convenience makes investing more accessible to busy professionals and individuals who may not have the time to visit a stockbroker’s office.
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Cost-effective
Online share trading is generally more cost-effective than traditional stockbroking services. This is because online brokers have lower overhead costs and can offer lower fees and commissions to their clients. This cost-effectiveness allows investors to invest smaller amounts of money and still see a return on their investment.
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Speed and information
Online share trading is fast and efficient. Investors can buy and sell shares instantly with just a few clicks of a button. This speed allows investors to take advantage of market opportunities quickly and efficiently. These trading platforms also provide investors with a wealth of information about the stock market, individual stocks, and investment strategies.
Final words
Online trading is a boon for investors in today’s era. There are various types of online trading options to choose from. Each has its advantages and risks. Choosing the right platform can be vital to your success. You can choose a SEBI-approved financial service provider like Religare Broking Limited which offers the best trading platform.
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