Similar to a bank account, a trading account acts as a common platform to sell or purchase securities. Securities are purchased through a trading account, held in a Demat account, and payments are done through the linked bank account.
There are many types of online accounts available for the purpose of trading securities, stock, gold, ETF’s, currencies, etc. These include Online Commodities Trading account, Online Currency Trading account, Online Equity Trading account and Online Derivatives Trading account. The commodities market is similar to that of a stock market, except that goods are traded instead of stocks. An online equity account allows you to invest in IPOs, equity, mutual funds and currency derivative instruments. Derivative accounts help make profits by betting on the future value of an underlying asset like currencies, stocks, exchange rates, etc.
An online trading account offers feasibility to investors as it is simple, stable and fast to deploy. It enables investors to track movements of trade-able assets and securities on a real-time basis. You can have multiple accounts based on your trading strategies. Some may have a trading account for buying and selling long-term stocks, retirement savings, margin accounts, etc. It enables you to set your own personal trading limits and buy/sell orders at your convenience. An online trading account also reflects the ratio between the cost of goods sold and the gross profit. It also gives you a list of your transactions, gives you real-time quotes, and provides research tools and technical analysis, thus enabling you to make better trading decisions.
The main benefit of an online trading account is the ease with which you can manage your stock portfolios without middlemen/brokers. It also gives you greater control to trust your own intuitions and take risks with your investments. Besides, the speed of transactions increases as everything can be done instantaneously. In a traditional set-up, one had to contact his stockbroker, who would then negotiate the price with the trader and place the order. This would often result in transaction delays. Online trading eliminates such issues. You can also monitor your stock as and when you wish, analyze research reports, read finance news and trade even when you are on the go.
An online trading account helps you trade financial instruments through the internet. You can execute buy/sell orders at the click of a mouse. It is easy to set up, and offers telephonic and online access. It contains a wealth of information about your trading details. Hence, you can make financially sound decisions to increase profitability. Such an account provides information on gross profit and loss. It also increases the speed of the execution and settlement of trade orders. You can also make as many or as few trades as you desire. Moreover, the cost of online trading is lower compared to traditional physical trading.