In the last few decades technology has changed almost everything you do and share trading is no different. There are no longer packed shopping floors with orders from the bottom, yelling from person to person, using hand gestures to buy and sell orders.
In this blog post, you will take a look at how technology is reshaping the way you see share trading platforms in India and enabling millions of people to invest in an entirely new manner. From real-time market data to AI-powered robo advisors, technology has been the latest blessing for the Indian stock market.
1. Democratizing Access to the Markets
One of the most significant effects of technology on share trading in India is unarguably the dramatic increase in retail participation in the stock market. A few decades ago stocks were the preserve of India’s rich. To trade, one needed to physically visit a brick-and-mortar brokerage, high fees were the norm, and real-time market information was nearly impossible to come by.
The evolution of discount brokerages in the late 90s and early 00s were the first nail in this coffin, at least commission wise; to even do it over the phone or for that number of shares would have been inconceivable. Still, the floodgates truly opened two decades earlier, when online-trading platforms began to come into their own in the mid-2000s. Thousands of thousands of Indians could now easily access the stock market, all with just a computer and an internet connection from the comfort of their homes.
This naturally grew in the 2010s when smartphone usage went near-ubiquitous alongside close to half a dozen mobile trading apps. India has 750 million smartphone users which makes it the second biggest smartphone market just behind China. Mobile optimized trading platforms, though, are changing the day trading landscape for Indians who can now trade throughout the day, whether in bed or standing in line for the loo.
2. Delivering Real-Time Market Data and Insights
One of the greatest impacts technology has with respect to share trading is the availability of stock quotes, news, analytics and more to every trader, in real-time. Retail traders have been trading the market forever and while there was nothing like market news, the best they could think of probably used to be reading about it in the papers. In old times, access to real-time price feeds and professional analysis was a restricted territory to institutional investors and HNIs.
Online brokers have helped even the playing field by providing retail traders with the same market data as the professionals. Anybody with a trading account can now see live prices, historical price charts, company fundamentals, market moving news and expert research report in their trading terminal.
All of this data and the tools to make sense of it has made investors the most informed bunch ever. Traders can, with a few clicks, sort through endless amounts of data to find opportunities and make better, faster trades. To boot, they can do it at a very low cost – most trading platforms bundle free or inexpensive real-time data and premium research.
3. Enabling Smarter Trading through Automation
Automation is another major way technology is changing up the lay of the land in share trading. Institutional traders have been using algo trading systems that buy and sell stocks according to established ruleset and years. However, even in the hands of retail investors, tech advancements have pushed these tools into the hands of retail investors also.
At the most rudimentary level, it has made it convenient for investors to enter trades. The software at the other end means that you are not physically doing the tasks you once did, like placing orders, reconciling trades or managing risk but this is all being handled by the software in an automated way. Investors are thus able to allocate more of their time and cognitive resources to higher-value activities such as research and analysis.
However, the real magic of automation is that it removes emotion from trading – entirely. You all know behavioral bias is the silent killer to portfolio returns (e.g., running after hot stocks or panic selling during a crash). Algorithmic trading executes trades based on predefined rules, and unlike humans, its trading systems are not influenced by emotions like fear and greed.
4. Enhancing Market Integrity and Stability
Despite the many benefits of technology for investors, it has introduced new perils in operational disruptions, cybersecurity, and market manipulation. For their part, regulators and exchanges around the world have scurried to keep up with technological advances and set up and maintain markets that are fair, transparent and resilient.
Indian markets had a reality check of sorts in 2010, with the NSE Nifty logging a flash crash of over 900 points and recovered within minutes. This breach was due to mis-tradedund (the wrong trade order that a dealer from a brokerage traded). Although the event itself did not end up hurting anyone, it illustrated the dangers inherent in high-frequency trading with not enough oversight.
SEBI has already provided a number of tech-enabled safeguards to prevent such incidents and to secure market integrity. Capital markets regulator Sebi has ruled that brokerages need to have strong risk management systems to stop irrational trades. Circuit breakers that temporarily stop trading when major indexes fall by a certain percentage have been implemented at stock exchanges.
5. Paving the Way for Innovative Products and Services
The most thrilling impact of technology on share trading in India – On share trading in India, new technological solutions are paving their way, which is an umbrella term roughly referring to a stock exchange market. With digital infrastructure currently at its peak, fintech startups are going tech-driven to provide an easier and much simpler investing experience while ensuring its personalized to the targeted user.
Our fractionally investing is one of the new things trending. This is – quite literally – letting investors afford high-priced stocks despite the size of their budget by selling a portion of the share. As a result, even if you do not have Rs 1,50,000 required to buy 1 share of MRF, you can still buy an exposure to the stock for as little as Rs 100!
Gamification is another trend that’s attracting $ by making investing fun & rewarding, especially for millennials. Trading leagues, leagues, rewards, social – Grow and 5paisaTypes of: Sometimes trading is just a way to have fun, that’s all. Using behavioral economics tactics taken from gaming, fintech companies have gotten first-time stock buyers to dip their toe in the market and hopefully establish better financial behaviors.
Conclusion
To sum up, technology has led a silent revolution in the Indian Share Trading Anatomies. By democratizing access to the markets through online stock market trading account, giving real-time insights, enabling smart trading through automation, increasing market integrity, the stability and bringing in innovative products and services, technology is changing the way Indians invest.