Trading as we know it has evolved a lot over the years and especially over the last two decades. Many years ago, trading was actually done at an Exchange with hand signs and signals. Some of us might still remember it. Today it has changed drastically. Traders now trade over computer screens with hi-tech trading platforms. The terms online and offline trading evolved out of this prevalence of technology.
What is Offline Trading?
Offline trading is when you physically tell your broker to place a trade over an Exchange. You can call your broker or visit the broker’s office. Your broker will do a verification of your profile and place a trade on your behalf. Offline trading is likely to take more time. There are chances of a lot of back and forth between the broker and the trader, and the broker and the Exchange. During this transaction, chances are that the stock prices might move in a direction not favorable for the trader.
Offline trading is slowly becoming less and less common. The most common practice nowadays is to place trades via an online trading platform. However, offline trading is crucial in case of technical failures. If the trader does not have access to a strong internet connection, offline trading is the next best option. If the trader can afford to wait out the time that it takes to place a trade offline, then it is a good way of trading. Usually, it is better to trade offline if you are absolutely sure that the stock you are trading won’t change much.
What is Online Trading?
Online trading is when a trader actually uses a trading platform to place his trades over the Stock Exchange. It is suited for short-term trades since it reduces the time taken for someone to actually place a trade.