Stock exchange is a place where stocks are traded.
In India there are two big stock exchanges - Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
Then there few small stock exchanges also.
An investor has the freedom to trade stocks in any of the stock exchange in India.
Online Stock Trade can be done through an internet based stock trading facility.
An investor is able to trade shares through a website and there is no manual intervention from Stock Broker in this facility.
Online stock trading companies are stock brokers in this case.
These companies are registered with one or more Exchanges.
The most common Online Trading Websites trade in NSE and BSE.
For online stock trades there are two kinds of trading environment available; Software based trading terminals which require software to be installed in the computer of the investor.
The broker provides these terminals and a high speed internet connection is needed to trade through this.
These trading terminals are mostly used by high volume day equity traders.
There are both advantages and disadvantages associated with this system.
The advantage is that orders are executed faster as there is no stock broker involved.
Disadvantage is restricted location, i.
e.
you need to trade from the computer where this software is installed.
Other trading environment is the web based trading application where there is no requirement of additional software.
This works like other internet websites which can be accessed from anywhere where there is internet connectivity.
There are some advantages and disadvantages as well with this system.
Advantages include real time trading without intervention from stock broker, availability of online tools like market watch, etc, ability to set alert to obtain information on the stock through SMS or email and other advantages.
Disadvantage is that at times the website is too slow or not enough user friendly.