Definition of Online Trading
Online trading include activities in which investors directly place the orders for securities exchange by electronic communication channels such as internet. This is a full automatic process and after applying necessary controls in the brokerage company, orders will be automatically sent to transaction system of Securities Exchange of Tehran or OTC of Iran for conducting the transactions. In online trading, all operations that were conducted in traditional methods and internet transactions method for securities with human interface, has been completely mechanized and all affairs will be conducted in a fraction of second by using secure telecommunication platforms. By using this technology, with no need to refer to any brokerage and or bank, investor quickly places the orders for securities transactions.
Online trading system provides the capital market with this possibility by which investors could place their transaction orders for their shares with high speed and sent it to Stock Exchange Transactions System. The speed of processing and sending in such transactions is high to such extent that it seems that customer is on the transaction system and enters its order directly to the transaction system; however, in the backstage, by placing any order, there are performed necessary reviews for identification of customer, balance of customer by brokerage and bank as well as balance of customer’s shares.
Comparing the common methods for securities transactions and internet transactions with online trading
In traditional method that was almost common since the beginning of Tehran Stock Exchange, by referring personally to brokerage companies, investors placed their trading orders by completing the paper forms. Albeit, since this time, customer must transfer the cash for purchasing the securities by referring to bank and transfer it to the account of brokerage and send related receipt to the brokerage; it is also possible to place orders by telephone calling for some customers; however, due to high risk of call orders, it isn’t usually possible for all customers in traditional method.
In internet trading method, investor places its order by internet to brokerage. By receiving the orders and applying necessary controls, brokerage enters the orders manually to stock exchange transaction system. In internet transactions, investor signs an agreement with Brokerage Company and receives username and password. Thus, it isn’t necessary to refer to the brokerage company for any transaction. For paying and collecting the funds, by the emergence of electronic accounts, this could be conducted with no attendance albeit by some delay.
In online trading, all brokerage activities for reviewing the orders of investor and sending it to the stock exchange has been automated. In this procedure, in a fraction of second, investor receives the market data including price and size of securities and the period between clicking the “Send Button”, his order will be registered in transaction system of stock exchange in a fraction of second after applying necessary controls in the brokerage.
Advantages of Online Trading
How to supply the fund of purchase orders in online trading
Online trading include activities in which investors directly place the orders for securities exchange by electronic communication channels such as internet. This is a full automatic process and after applying necessary controls in the brokerage company, orders will be automatically sent to transaction system of Securities Exchange of Tehran or OTC of Iran for conducting the transactions. In online trading, all operations that were conducted in traditional methods and internet transactions method for securities with human interface, has been completely mechanized and all affairs will be conducted in a fraction of second by using secure telecommunication platforms. By using this technology, with no need to refer to any brokerage and or bank, investor quickly places the orders for securities transactions.
Online trading system provides the capital market with this possibility by which investors could place their transaction orders for their shares with high speed and sent it to Stock Exchange Transactions System. The speed of processing and sending in such transactions is high to such extent that it seems that customer is on the transaction system and enters its order directly to the transaction system; however, in the backstage, by placing any order, there are performed necessary reviews for identification of customer, balance of customer by brokerage and bank as well as balance of customer’s shares.
Comparing the common methods for securities transactions and internet transactions with online trading
In traditional method that was almost common since the beginning of Tehran Stock Exchange, by referring personally to brokerage companies, investors placed their trading orders by completing the paper forms. Albeit, since this time, customer must transfer the cash for purchasing the securities by referring to bank and transfer it to the account of brokerage and send related receipt to the brokerage; it is also possible to place orders by telephone calling for some customers; however, due to high risk of call orders, it isn’t usually possible for all customers in traditional method.
In internet trading method, investor places its order by internet to brokerage. By receiving the orders and applying necessary controls, brokerage enters the orders manually to stock exchange transaction system. In internet transactions, investor signs an agreement with Brokerage Company and receives username and password. Thus, it isn’t necessary to refer to the brokerage company for any transaction. For paying and collecting the funds, by the emergence of electronic accounts, this could be conducted with no attendance albeit by some delay.
In online trading, all brokerage activities for reviewing the orders of investor and sending it to the stock exchange has been automated. In this procedure, in a fraction of second, investor receives the market data including price and size of securities and the period between clicking the “Send Button”, his order will be registered in transaction system of stock exchange in a fraction of second after applying necessary controls in the brokerage.
Advantages of Online Trading
- Customer ensures that his order has been registered in the transaction system exactly in given time;
- It is lower possibility of mistakes because online trading relieves from any oral communication with broker in a very busy environment.
- Customer receives online information for market including latest price, offer and demand,… and ensures that these are online information with no delay and no one access to such information earlier than him and this will improve competitive space.
- Customers could observe their statement information on online based.
- It isn’t necessary for customers to attend in the brokerage and signing the written orders.
- Because customers are responsible for sending their order, any probable difference between brokerage and customers for deadline of entering the order and its cost will be removed.
- Because customers enter their orders, the number of entrance points will be severely increased that current situation (about 600 trading stations).
- Buyer and seller decision is influenced by information and their analysis not traders in the brokerage.
- Because all necessary controls applied before sending the order to transaction system, it has very low risk of not conducting the dealing in the trading system.
- For better access of customers to trading system, investment has been facilitated; for this reason, newcomers will enter the market and followed by developing the national capital market.
- It is possible to send and modify the transaction orders at any time as required by customer during the trading hours from any geographical point.
How to supply the fund of purchase orders in online trading
- Electronic payment by acceleration member cards;
- Balance of credit account of customer with Ayandeh Brokerage;
- Settling the funds to any account of Ayandeh Brokerage and sending the physical properties of transfer receipt;
- Selling the shares by online trading system;
- Connecting to the bank and withdrawing from the account by online trading system.
Definition Of Online Trading
