What is online trading & how does it work?

Online trading in India officially began in 2000 when the National Stock Exchange (NSE) provided internet-based trading services to its members. For the first time, individuals could place stock market orders digitally, through broker platforms, without needing to call or physically visit a broker. This screen-based trading systembrought unmatchable speed, transparency, and a new sense of independence to market participation.

Since then, online trading has experienced significant growth. By FY25, India recorded an all-time high of 192.4 million demat accounts, a sign of how deeply this digital transformation has shaped the way Indians approach trading. What once felt like a tool for professionals has now become the default way millions of individuals access the stock market.

Read on to learn more about online trading, how it works, and the benefits it offers to traders.

What is online trading?

Online trading is the process of buying and selling financial instruments such as stocks, commodities, and Futures and Options (F&O)via internet-based platforms. You can research, place orders, and manage your portfolio by yourself, from anywhere, through a smartphone, tablet, or computer.

How does online trading work?

To begin, you need to open a demat account on a reliable trading app or website. After completing the necessary documentation (generally PAN, Aadhaar, and bank details), you fund your account. Once set up, you get access to a trading platform that connects you to the stock market.

Here is how a typical online trade works:

• You log in to your trading app/website.
• You decide which asset to purchase or sell.
• You place an order, then specify the quantity and price.
• The platform quickly routes your order to the relevant stock exchange.
• If a matching order exists, the trade executes within seconds.
• Both buyer and seller get confirmation, and the transaction details are securely recorded.

Indian exchanges usually followed a T+2 settlement cycle, but T+1 and T+0 settlements are now being adopted to give traders more convenience. Once the trade is settled, the shares get credited to the buyer’s demat account, and the funds get transferred to the seller’s bank account.

Key aspects and benefits of online trading

• Convenience: Trade and monitor your portfolio from any location.
• One-click execution: Execute buy or sell orders with a single click.
• Real-time monitoring: Check live market data, price updates, notifications, and news to make informed decisions based on the latest information.
• Transparency: See a clear breakdown of all charges and fees to understand each aspect of your transactions.
• Crucial stock details: View detailed information about every stock, including price history, financials, and performance charts.
•  Multiple tradable instruments: Trade in equities, commodities, US stocks, or futures and options.

• Stock recommendations: Narrow down trade ideas with the help of expert-curated stock suggestions or trending lists.

• TradingView integration: TradingViewoffers a wide range ofpowerful charting and technical analysis tools. You can apply indicators, compare assets, and analyse price patterns directly within the platform.
• Learning resources: Go through video tutorials and FAQ sections to understand market dynamics, build useful skills, and avoid trading mistakes.

To sum up

Online trading has made stock market participation more practical, efficient, and accessible. You get multiple tradable instruments, real-time data, ultra-fast order execution, TradingView integration, detailed stock-level insights, educational resources, daily trade ideas, and transparent charges. All these features simplify trading and help you exercise control over your trades.

Want a premium online trading experience? You can consider MO Riise by Motilal Oswal. Backed by the trusted legacy of a SEBI-registered public entity, the app is already used by 40 lakh+ traders. In addition to the features highlighted above, you benefit from UPI-based payment options, personalised trading tools, fractional ownership in US stocks, and StoCoMo (an active community of traders). For assistance, dedicated customer support is available 24/7.

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