Click to Trade

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Till recently, 52-year old Pawan Dharnidharka would spend two hours daily commuting between his home at Malad to Church Gate to buy and sell shares. He no longer bothers with the long humid run. He simply switches on his computer and logs onto the online trading site he signed up with. 8220;Not only I do I save on travel cost, but by the end of the day I have peace of mind and yes, money,8221; says the father of two. To get stock tips, Dharnidharka uses his two mobile phones and has linked up with a broadband company for a smooth and fast internet connection.

While Dharnidharka is a professional trader who makes a living out of trading, others too are switching over the online trading to buy and sell on their own time, at their own pace and using software that puts them in control. Many homemakers, small businessmen, office executives and even students are now trading online. Take the case of Mumbai-based homemaker Avanti Pande who likes the extra spending money equity trading gets her but doesn8217;t trade every day. Pande says, 8220;I don8217;t trade everyday, but buy and sell once or twice a month. My monthly earnings are close to Rs 20,000.8221;

The Advantages
The big pluses for most people are the comfort and cost saving that on-line trading affords. The click of a mouse now does away with the tedious process of placing orders with a stockbroker, either verbally or in a written form, and then getting the paperwork done. Trade online and you have access to a stockbroker8217;s website through a net-enabled computer and you can place orders through the broker8217;s internet-based trading engine. These orders are then routed to the stock exchange without manual intervention and executed in a matter of a few seconds. After registration, an investor is also required to deposit a certain amount of initial margin deposit, which will be used to calculate the trading limits. The deposit usually starts from Rs 5,000. But if you give higher amount as margin money some portals reduce annual maintenance fees.

Trading portals are aware of the huge value add that online trading offers and are now competing hard to get your account. They are even sending executives to your home or office to sign up. As free add-ons they offer to research stocks, give company information, offer online charts, live quotes and maintain an online portfolio. Competition gets them to reduce upfront fees and annual charges, see the comparison in the chart to the right.

Kotakstreet.com already has about 40,000 customers while Indiabulls.com is close behind with 30,000 customers. ICICIdirect.com is also an aggressive player in the industry while Sharekhan.com, owned by stock broker SSKI Securities,is concentrating on the metros. While most of them offer trading opportunities for equity, mutual funds, and derivatives, some like http://www.5paisa.com are also offering commodity trading.

BUT IS IT SAFE?
With internet stock trading expected to see a jump in the coming days, almost all portals are taking extra precautions to ensure safety. Companies are investing in technology and are asking customers to become cautious while trading, specially with their passwords. ICICI Direct officials say that most customers complain about forgetting passwords rather than anyone hacking into their system. However, just recently a hacker sent a notice to all ICICI Bank customers asking them about their passwords and account numbers. The company immediately swung into action by blocking any hackers who tried to get into their systems and sending a mass e-mail to their customers asking them not to reveal their identity to any hacker. Remember NOT to give your password or account number to anyone who is asking for it over the telephone, even if they claim to be from the company. The portals will never ask for your password.

Keep these safety tips in mind and then use the net to smoothen out your investment life.