Be your own broker, online trading is here

The turnover figures collated by the National Stock Exchange reveal that only 16 per cent of trading results in actual delivery of shares while the rest is squared off. Similarly, BSE data shows 18 per cent shares being delivered. Thanks to growing internet penetration and ‘three-in-one’ accounts offered by new generation private sector banks, a large number of Indians including students, housewives and even officegoers are trading in shares.

“I opened a three-in-one account with ICICIDirect which allows me to trade shares and transfer demat (paperless) shares to my depository account and transfer funds from my savings account to buy shares,” says K. Janaki, working with a multinational. “Sometimes I trade from my office computer although it is banned. But I can’t help it as I am just hooked onto this,” she adds.

The online trading has generated so much excitement that already two per cent of total turnover on the bourses each day are routed through this new high tech route. “The online trading has given everyone the access to a online casino. Only those people are making money who have access to inside information leaked by the company themselves while others are simply trying to get back their lost funds,” says Bharat Jivarajka, a NSE broker.

Internet trading requires customers to only transact, the rest is taken care of by the bank like securities transferred in the depository account, debiting his bank account and vice versa. With no paperwork involved, many people—having access to internet—are operating from their offices, thus affecting their productivity.

With the help of internet trading, the Indian stock markets—mainly the BSE and National Stock Exchange—have reached almost each and every corner of the world but the net trading is mainly prevalent in the metro cities.

“I have made a lakh but I am still waiting for the big booty,” adds Janaki who started off with a Rs 10,000 to make a lakh purely on the basis of going against the tide. “I bought Infosys when others sold and sold them when others were buying,” she adds. Her tip: “Always trade in big companies and never follow the herd.”

Many a times, she reveals, she bought and sold shares of her own company based on inside information —which is illegal. “Do you think anyone who makes money in the market is doing it legally?” she asks when questioned. Thanks to a toothless market regulator, the Sebi, most of these trades go unnoticed.

In future, says ICICIDirect.com officials, more investors are expected to be hooked onto net trading due to easy access to markets which was not available otherwise. The company plans to go to all Indian cities to spread the equity culture.

One more reason for a rise in internet trading is that very few investment options are now available with the investors after the interest rates fell to new lows, institutions like UTI crumbling and property investors losing their shirts. “The absence of proper investment avenues is one of the main reasons why investors are getting into the internet trading badwagon. It is catching up fast as people want to make money,” adds Aiyar. “But I suggest novices should remain out of the market and invest through a mutual fund,” says he.

As for More she is back to counting notes with a private sector bank.