Online share trading platforms make it cheaper and easier to buy and sell shares from India and overseas. You can use our stock broker comparison table below to compare fees and features and find the best deal for you.
Looking to trade shares online? There are a number of online platforms available in India, but it’s important to compare them before you sign up. This guide will teach you how online share trading platforms work, how you can make money from trading, what fees you’ll pay and what all the investment terms mean.
How does online share trading work?
Online share trading is exactly what it sounds like: you use an online platform in India to buy, sell and trade shares online. These platforms can be available on a website or as an app and let you set up an account and trade shares from the National Stock Exchange of India (NSE) or other stock exchanges globally.
Many platforms also let you trade other types of investments, such as index funds, ETFs and more. You can also make use of online tools such as copying high-profile investors, in-depth research on stocks and easy access to data to inform your trades.
Using an online platform is far cheaper than using full-service brokers. When you buy shares online, you’ll pay a brokerage fee for each transaction, which typically ranges from ₹0 to ₹20 for trades on Indian stock exchanges, as opposed to ₹35 or more for full-service brokers.
The standard trading hours for Indian stock exchanges like the National Stock Exchange of India (NSE) and the BSE (formerly known as the Bombay Stock Exchange) are 09:15am to 3:30pm IST Monday to Friday, while other global exchanges keep similar hours.
How to buy shares online
Buying shares is a relatively simple process:
- Choose an online share trading platform
- Sign up for an account
- Choose the shares you want to buy
- Place your order
- Pay for the transaction
- Monitor the performance of your shares
- Sell your shares (if you want to)
For a more detailed guide on the process of buying shares, take a look at our 6 step guide to buying shares online.
What features should I look for with online share trading platforms?
- Advice and research options. Online brokers in India sometimes offer market news and updates as well as other research tools that will let you investigate the trading history of individual stocks.
- Bank account integrations. Some services let you transfer money easily from your trading account to a transaction or savings account. Others offer linked debit cards to use with your accounts.
- Access to Indian shares and global markets. Not all online platforms offer shares from every market. Check the platform lets you invest where you want.
- Investment options. Other products offered by some online brokers include forex, CFDs, managed funds and options trading.
- Strong customer support. Check what level of customer support is available, what hours it’s available and if the support team is based locally in India. This is particularly important for new traders.
How do fees work with online share trading platforms?
- Broker fees. This is the fee that is charged every time you buy and sell shares. Brokers in India charge different fees depending on the product you’re trading (for example, global shares, local shares and options), how often you trade in a month and the size of the trade.
- Monthly fees. Some brokers in India charge ongoing subscription fees or additional inactivity fees if you don’t make any trades within a certain period of time. This may or may not suit you depending on your trading requirements.
- Foreign exchange fees. If you’re interested in trading global stocks, you’ll want to check what the foreign exchange (FX) fee is for converting your Indian rupees to the foreign currency of choice.
Is trading shares online safe? What are the risks?
As with any type of investment, there are risks to trading shares online. Some of the risks remain whether you trade online or not, for example, you can lose some or all of your investment. Other risks are with the online platform you choose to use.
Before you start using a platform, check whether the online broker has a good reputation and is a trusted provider in the community. There are several key details to look out for:
- Reviews. Find out other users’ experiences with the platform by reading customer reviews.
- Experience. Find out how long it has been offering online share trading services in India. Is it backed by a large bank or financial institution?
- Encryption. Reputable online trading platforms rely on encryption technology to protect your sensitive information. This means that when you log in to a broker’s website, no one will be able to see any of the information transmitted between you and the broker.
- Login information. Check out what information you will need to provide in order to log in to your account. While many providers only ask for a username and password, others may ask you to enter an additional security code.
- Online checks. Does the provider offer online checks and restrictions to reduce the risk of fraud? For example, do you receive an SMS code that you will need to enter before trading or do you need to answer an online security question?
- Previewing trades. When talking about online share trading security, it’s also important to check that there are measures in place to prevent you from placing the wrong trade. For example, does the trading platform show you a preview screen outlining the full details of a transaction, such as the total cost and the total shares purchased, before placing a trade?
- Processes for dealing with fraud. Next, check to see what will happen if you’re a victim of fraud via your trading account. Does the provider have processes in place to reimburse you for any losses you suffer through no fault of your own if you are the victim of fraud? Are there any exclusions to when this cover applies?
- Customer support. It’s vital that if something ever goes wrong with a trade or you have a problem with your account, you can quickly access assistance from a company representative. Check to see when and how you can get in touch with the customer support team.
How to protect yourself when you trade online
- Watch out for scams. Just as online share trading technology has grown more sophisticated, so too have the methods used by scammers to trick people into giving up their account details.
- Keep your login details safe. This is an obvious tip, but one you should always remember. Never give your account login details to a third party, and don’t leave your computer unattended while you’re logged in to your account.
- Keep a copy of your records. Keep a record of all your online share trading transactions. Your records could be in a digital or hard-copy format, but should always be stored in a safe place. This will ensure that you have evidence to refer to if something goes wrong with your account or if you suspect you may have been a victim of fraud.
- Look after your computer. Make sure that you always keep your antivirus software up to date to protect your computer against malware and other viruses. In addition, check that you only ever log in to the trading platform via a secure Internet connection.
How can I make money from shares?
Investors in shares are fractional owners of a business, meaning they will profit based on the future outlook of the business or by getting part of the company paid to them.
There are 2 main ways to make money from share trading in India:
- Capital growth. If you can sell your shares for a higher price than what you paid for them, you’ll make a profit. This is known as capital growth, given that your initial capital (your shares) has increased in value. This is possible both with short-term investments (where you sell the shares after a brief period of time) and over longer periods.
- Dividends. Some (but not all) companies pay regular dividends to their shareholders based on the amount of profit they make, which can provide an ongoing income stream plus tax advantages for certain investors. Dividend payments are a great form of passive income and it means investors may never need to sell their shares in order to make a profit. Some companies offer dividend reinvestment strategies allowing you to increase your holdings by giving you more shares.
Tips for online share trading
Here are some tips to help get you started with share trading in India:
- Read the news. It’s important to stay up to date with the broader economy and learn how major events such as national elections impact the share price of various companies.
- Research companies before buying. If you want to buy shares in a company, research as much as you can about the company before making your final decision. It’s a good idea to read the company’s annual reports and meeting minutes to learn what’s in the pipeline and what changes will be made that could affect their share price.
- Upskill. It can be easy to lose a lot of money by making a poor investment decision or by simply clicking on the wrong button if you don’t know what you’re doing. Practise trading on a demo account first and consider taking an online investment course.
- Consider blue chip companies. This is a good strategy for people new to the share market, as blue chip companies often have more stable returns, are less volatile and often pay dividends.
- Diversify. Say you had ₹1,00,000 to invest in the share market. Rather than invest it all in one company, consider spreading it out across a few companies from different industries. Diversification will help lower your risk, and ensure you don’t have all your eggs in one basket.
Important information: Powered by finder.com. This information is general in nature and is no substitute for professional advice. It does not take into account your personal situation. This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for most investors. You do not own or have any interest in the underlying asset. Capital is at risk, including the risk of losing more than the amount originally put in, market volatility and liquidity risks. Past performance is no guarantee of future results. Tax on profits may apply. Consider your own circumstances, including whether you can afford to take the high risk of losing your money and possess the relevant experience and knowledge. We recommend that you obtain independent advice from a suitably licensed financial advisor before making any trades.