What are Trading Platforms? - Here's all you Need to Know | My Espresso

All you need to know about Trading Platforms

For those just setting their foot in the financial markets, a trading platform is one of the first things to know about. Trading platforms, in themselves, are quite simple to understand, but one has to learn how to use them effectively.

Published on 27 January 2022

That being said, below are some things that any trader or investor should know about trading platforms.

What are Trading Platforms?

A trading platform is a portal or a means to trade in the stock market. Through trading platforms, traders and investors who wish to invest or trade in the stock market or in other securities can open an account, access it with the help of a set of credentials, and manage the account based on their activities in the market.

What are the Types of Trading Platforms?

Trading platforms are of two types; if you’re familiar with the way traders conducted their trades in India until the 1990s, this traditional method is known as floor trading. Online trading, the other type, came to India in the year 2000 and instantly caught up with the market due to the convenience. This is also known as e-trading or electronic trading.

Earlier, stock exchanges were physical venues where a broker would help investors and traders communicate and trade. The investors would have physical share certificates, which can today be stored on a demat (dematerialisation) account. This is known as floor trading.

Once online trading was introduced, many things changed for the stock market. For one, the stock exchanges such as the National Stock Exchange and the Bombay Stock Exchange became more popular as online entities while maintaining their offices.

Trading platforms are much more convenient because the entire process of placing a buy or sell order, finding a match for the order, and then executing it takes place in a matter of minutes, as opposed to a longer time frame in floor trading.

The broker who would help investors and traders communicate in the stock exchanges has now been replaced by an online broker who can execute your trades on a call or independently carry out the trade through the online platform provided.

How to Open a Trading Account to Access a Trading Platform?

These are the steps that you need to follow to open a trading account:

  • Opening a trading account is simple once you find a broker of your choice.
  • Choosing a broker needs some amount of research about the services they offer, the fees they charge and what other users have to say about them through online reviews.
  • The broker will then help you open an online trading account. If you are interested in holding your securities for the long term, you will also need a demat (dematerialisation) account. For regular trading, the trading account acts as a link between your demat and bank accounts, and it is where the transactions take place.
  • You will need to provide relevant documents such as identity proof, proof of income, PAN details, Aadhar card for e-KYC (electronic Know Your Customer) and any other documents as needed.
  • The broker verifies these details, after which you will receive a set of credentials to sign in to your trading account.

Online trading accounts are easier to manage and provide resources from the online broker. You can access market research reports, the latest stock news and knowledge material that can help you trade more conveniently in the stock market.

Conclusion

Though trading platforms have certainly made it easier for you to carry out online trading, there are certain costs associated with using a trading platform. So before you start using one, always remember to understand these fees and costs so that you can trade online with ease and not worry about any hidden charges.

Chandresh Khona
Team Espresso

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