Share Trading - Online versus Offline

Share trading is selling and purchasing of shares of listed companies with any of the recognized stock exchanges. When an investor buys or sells securitiesthrough stock exchanges via the Internet, it is called online share trading.

If he, on the other hand, buys/sells them without online facilities, bypassing the stock exchanges, it is referred to as offline trading. In this case, his broker may find a buyer/seller or he may enter into a trade on his own with a buyer/seller by agreeing upon a mutually acceptable price.

Numerous investors have already made the big shift to online share trading but there are still a few who preferthe offline method. One of their main reasons for this is security.

Online share trading,on the other hand has given way to a great database of knowledge and tools on stock market trading that once was available to brokers and professional investorsonly.Even futures and options trading can be conveniently done by investors through this platform.

There are a few moreconvincing reasonsto consider making the shift:

• Online share trading offers great saving opportunities. The fees and capital required are lower than that needed in offline trading.

• Although trades are executed only during market hours, one maymake them anytime of the day, irrespective of the time zone.

• The investor may trade from anywhere in the world, as long as he hasa computer and Internet access.

• He would get quotes and confirmation of transactions in real time.

However, the investor may trade only to the extent of credit in his trading account.

Some people, however still feel more comfortable with the traditional system of offline trading because:

• Itoffers a more personalized touch. Investors have the professional help of experienced brokers who provide immediate answers to their queries.

• If investors are not confident about their knowledge of share market basics,but still want to invest, offline trading is the best solution.

• Funds may be transferred online as well as by cheque

• Incase of any major ups and downs, the dealer would call and give some personal attention to the offline client

• Trading limits may be flexible, depending on the relationship with the broker

However, offline trading involves too much dependence on the broker as well as higher brokerages and commissions.

Traders and high net worth individuals (HNI) with a need for fast and professional execution of orders usually consider the offline option. Small investors, on the other hand are increasingly going the online way.