In ultra-fast world, where the stock market is concerned, a few minutes can affect one’s profit and loss margin. Stock market prices and market fluctuations can literally change in minutes. The facility to trade stocks from a mobile enables you to keep up with any changes in the stock market, make decisions as to whether to buy or sell based on those changes, and complete the transaction in a timely manner. Is it possible in India? Yes!
The Securities and Exchange Board of India (SEBI) today permitted mobile trading and smart order routing (SOR) between stock exchanges. This is a huge step that will improve the volumes on stock exchanges considering there are more than 450 million mobile connections but just 10 million DEMAT accounts.
What it means for an investor?
The technology: Smart Order Routing eliminates the role of a broker or an internet enables computer. Just like normal platforms it helps investors choose execution destinations based on the best price, costs, speed, likelihood of execution and settlement, size, etc.
The broking house will just have to develop an application (compatible with a variety of operating systems of handsets) and help the client install this in his GPRS enables cell phone. The investor has to login into the application using the same id/passcode as that of DEMAT account used on internet with the brokerage house.
What is means for the exchange houses?
Till now internet based platform was gaining popularity but with this new platform, volumes are going to reach new heights. However SEBI will not make the task for them so easy. The circular just released has large number of requirements from exchange houses.
In a gist, A mobile trading system needs to have the following characteristics as a minimum requirement: Offer true real time prices with no delay compared to trading room systems, Enable single or two click trading with the option of confirmation windows to minimize the increased risk of data entry error due to the small screen size, Provide for professional traders an interface which is consistent with that of the trading room system to enable full fast and accurate trading without a long learning curve
- Making sure how phone/application works before making the first trade
- Using a separate cell phone exclusively for mobile trading
- Guard your financial information just as you guard the same on your personal computer
- Like Internet, being watched by monitoring your IP packets.
Will the emergence of SOR on mobiles and wireless access to trading result in a revolution in trading patterns or maybe better products? Only time will be able to tell…what do you think ?