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Explained: How mobile trading of stocks is done
With the Bombay Stock Exchange launching its mobile trading platform on Tuesday, the stock market is all set to get a tech boost.
Especially since the National Stock Exchange also plans to launch a similar service in the first week of October.
A month ago, the Securities and Exchange Board of India gave permission to the stock exchanges and brokerage houses to offer mobile trading services to their clients. But many investors have a question: How will this platform work?
Business Standard decided to visit a few brokerage houses and the stock exchanges to demystify the nuances.
The steps
Stock trading on mobile can take place in two steps: First, through an application downloaded onto the user's mobile, or mobile phone browser.
Brokers have the options of developing the mobile trading application in-house, buying it from a vendor or going in for those offered by the stock exchanges.
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Explained: How mobile trading of stocks is done
In the second step, BSE will facilitate trading through its mobile application software called FASTRADE, while NSE will do it through its software NOW.
A senior BSE official says: "The exchange provides Internet-based trading through its application FASTRADE, which has been upgraded to disseminate data through mobile phones. It has been modified to provide trading on mobile handsets. This is being made operational today."
The app
At present, BSE investors can get real-time updates on the market, and also the stock prices by downloading the 'Sensex Streamer' from the BSE website onto their mobile handsets.
They can view information of the last traded price, percentage change in price, buying and selling prices and the latest quantities of 30 BSE stocks bought and sold.
A sneak preview of NSE's mobile application can be downloaded from its web site (www.nseindia.com) for GPRS-enabled handsets.
But, at this point, this allows one to access only market data. The actual trading will happen through a broker's software application that needs to be downloaded.
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Explained: How mobile trading of stocks is done
To trade, one needs to have an Internet trading account with the broker.
Demo at NSE
The best time to test the NSE application is during market hours. Clicking on the downloaded application took me to two options: Trade and Market Data.
Currently, the trade option cannot be clicked on, but it will be made available once trading is permitted.
The market data one did work, and gave me several options. But some -- like view orders, place order, charts and positions -- are not yet available. The only options available are 'get quote' and 'market watch'.
Get quote: This option allows one to choose between equities, derivatives and currencies. After clicking on equities, I feed in a scrip name in a search bar.
Inputs like bid and ask (size), the stock's opening price, its previous close and its highest and lowest price during the day can be viewed.
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Explained: How mobile trading of stocks is done
Market watch: This option allows one to view the performance of such broad indices as the Nifty or Nifty Junior and the stocks constituting these indices.
The browser
Some brokers feel making online trading available on web browsers is a simpler alternative to applications described above.
Similar to Internet trading, the web page designed for mobile phones can give users a better experience, they say.
IIFL's mobile web site allows you to buy and sell shares, and also view your order book and trade book. You can log in using your Internet trading account's username.
Sankarson Banerjee, chief information officer, IIFL, explains: "Internet tends to be very data intensive. For instance, on the Internet, one may see 50 scrips with 10 columns giving different data points on the same web page. But given the constraints of a mobile phone, one may see fewer scrips and data points on the same page."
For instance, on clicking the 'buy' option, the screen immediately throws up various fields. One has to choose the exchange (BSE or NSE) and order type (cash, futures and options), quantity and price.
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Explained: How mobile trading of stocks is done
After you fill in the information and place a dummy order, it takes you to another web page asking for a confirmation of the order.
On confirming, the order will reflect in the trade book or the order book, depending on its status.
Even the browser is an elegant solution. Whatever option you choose for trading through your mobile phone, it will only be a trading platform.
The settlement mechanism will be the same as that for Internet trading.
As Vishal Gulechha, head of online broking, ICICI Securities, puts it: "The process for trading remains the same, only the device has changed."
The good news: It is not complicated.
