Apps that allow you to trade while on the move find favor among retail investors
However, the long hours of traveling on the job made finding a terminal to place trades a problem. That was till he took to trading on his mobile phone. He has not missed an opportunity to trade since.
For a regular trader on the stock market, a buy or sell is all about getting the timing right. This can be a problem for those working on limited access terminals or traveling extensively. The solution appears to lie in your mobile. How can you harness the power of these platforms?
How it works
India has become the world’s fastest-growing market for mobile-based stock trading since its launch in 2010. On the NSE, the turnover of mobile transactions has increased by 130% over the past year, from `50,800 crores in August 2014 to `116,186 crores in August 2015. Experts say these figures could double in the next two years. “The contribution of mobile trading to total turnover could go from 1% now to 3-4%.
Mobile trading is favored by retail investors whose investing ticket size is low. Increasingly affordable smartphone devices and cheap Internet plans have helped. All you need is a smartphone and a trading account with a broker. Once you download the broker’s trading app, you are good to go.
Trading on the mobile is the future.“After shopping and booking taxis, it is a natural progression for mobile users to start trading on their hand-held device. Being able to trade while on the move is the primary reason for customers shifting to the platform. Mobile-based trading has also made the stock market accessible to investors in small towns. “People from tier 2, 3 and 4 cities are driving the maximum traffic on our platform. Mobile trading has also found favor among women.
What it offers
The apps provided by most brokers are `white-label’ platforms or generic applications developed by a third party and adopted by the broker. A few brokers have launched their own apps, which offer unique features. Others are also moving to their own software platforms for the mobile. Most discount brokers are also adopting mobile technology for the benefit of their users. In fact, discount brokers report the largest proportion of mobile-based users at 30-40% of their client base.
The mobile platforms allow trading in the cash segment, as well as future and options segment on leading exchanges. Most of the apps allow trading in the commodities and currency markets, as well as investments in mutual funds, NCDs and bonds.
Besides, these mobile trading platforms provide streaming quotes of your favorite scrips to help track moves in real time. Worried about having to transfer funds to the trading account?
The apps allow the seamless transfer of funds from your bank account to your trading account, and vice versa, through your smartphone. The app also provides trading ideas, apart from access to company-specific financial data. Most mobile apps also offer charting tools for users.
Brokerages charge competitive rates on their mobile trading platforms in line with those levied on Web-based platforms. The rates are typically lower than those charged for call-in trades. Some even charge lower rates specifically for transactions on the mobile.
Should you migrate to mobile?
Is there a compelling reason you should not switch to mobile trading? Those who use computer terminals for trading do so because of extended facilities like sophisticated charting tools.
Most mobile trading apps may not allow the user to place a bracket order, where one can take an intra-day position and take advantage of the extra exposure while being protected through a stop-loss order and a profit booking order. However, mobile trading platforms are also evolving and adopting newer technologies that could provide users with more feature-rich access.
The smaller screen size of the device may also prove inconvenient. While mobile platforms offer charting tools, it may not be possible to open multiple charts on the screen at the same time. Also, the onus is on the user to feed correct details while placing the order.
Concerns over security may be unwarranted. These platforms use the same security protocols adopted by Web-based portals, including online retailers. Security is not an issue at all. It is similar to using other apps where you access the trading platform with your unique credentials. Most apps have a two-step authentication process–the user first logs in with his existing user ID and password and then punches a unique PIN or one-time password. However, users must not store the security numbers on their device to prevent misuse.
With the proliferation of smartphones and mobile data consumption, it does look like mobile trading will gain popularity. The mobile trading app ensures I remain on top of things, with the on-tap availability of stock quotes, price movements and ability to place instant orders.
However, the flipside of this ease of access is that it may tempt some to trade too often. It could lead to frequent churning, adding to transaction costs. It is up to the user not to over-trade just because he now has the market on his fingertips.