The world of trading has undergone a tremendous amount of transformations over the decades, particularly during the last twenty years. Trading, which earlier used to take place with hand signals and signs at an exchange, is known as offline trading and is today replaced by technology-based trading terminals. Technology brought in terms such as online trading and offline trading.
How Offline Trading Works
Offline trading, on the other hand, is a form of trading where a person manually orders their broker to enter a trade on an exchange. The broker verifies the trader profile and executes the trade on their behalf. It is a slow process that includes multiple interactions between the trader, broker, and exchange. Thus, stock prices may fluctuate unfavourably while executing the transaction.
Key Characteristics of Offline Trading
Some of the most significant characteristics of offline trading are:
- Physical contact with a broker for executing trades
- Authentication of trader profiles before executing trades
- Risk of delay and ping-pong exchange between the parties
- Significant risk of adverse price movements during trades.
Strengths and Weaknesses of Offline Trading
Even though offline trading is decreasing because of the ubiquity of online trading websites, it has its advantages. For example, offline trading can be an appropriate substitute in technical breakdowns or unstable internet connectivity. Additionally, offline trading can be an appropriate choice if a trader is sure that the stock price will not fluctuate much. Nevertheless, one must balance the advantages with the possible disadvantages, e.g., longer processing time and higher risk.
Conclusion
Although offline buying has its advantages, it is no longer in as much demand among most traders due to the significant benefits which online buying offers. With brokers such as Religare Broking offering quicker speeds of execution and lesser risk involved in terms of price fluctuation while placing a trade, traders can make better decisions more quickly.