IT and Stock Market

A few months ago, my aunt came home with the news that she had got a bonus of Rs.50000 at work. She was asking around the dinner table about what she could do with the extra money, apart from the usual advices such as buy gold, open a fixed deposit account and go for shopping. My grandfather came out with something that had skipped even the minds my father and me. He suggested to invest the extra money in the share market and not to waste it on trivial things. This came as a surprise for me because even though I actively follow the stock market and find it very interesting, when asked by my aunt I was thinking about android phone. My father, who holds stocks in various companies and is actively trading stocks online, was probably thinking about a gold necklace. My aunt was intrigued by my grandpa’s suggestion mainly because he had not bought a single share in his entire life and he is a person who does not take risks especially when it comes to money. When asked why he suggested stocks he gave a simple reply, “It is easier now-a-days to buy and sell stocks and keep track of your portfolio performance. In our days we had to go through hell just to apply for a share with no certainty of the share being allotted to us. Then there was the problem of the margin money not returning to us but the main problem was that we relied on the newspaper, radio and TV as our source of information.” What my grandfather said struck me deep. This is because what I considered a run-of-the-mill was a privilege for him. 

Information technology has transformed people’s attitudes toward investing. As we all know, traditional stock trading was done through brokers either in person or through telephone. With a number of investors on the rise, stock brokers faced a lot of problems through the traditional method.

Information Technology helped solve these problems with online trading. These online stock trading companies act as brokers for the investors. Most online trading websites in India trade in BSE or NSE. Shares are held electronically in a demat account instead of physical stock certificates. A demat account is opened by the investor and its access requires an internet and a transaction password. The demat account number is quoted for all transactions. Not only did IT increase the volume of investors in the economy, it also paved the way for anyone with a decent internet connection to become an investor. 

People seldom complain about lack of information about any particular stock, with the investor being bombarded with various services from online trading platforms that range from riskometer to advising the investor whether to buy, hold or sell a particular stock. With the invention of smart phones, stocks are literally held and traded at the fingertips of investors. Even though such high speed services are available to all, it takes a real understanding of the stock market to know when to buy and sell thereby making a profit in the market. 

The real investor has to analyze various factors like interest rates, performance of the company, market trends, expected returns etc. in order to gain an upper hand in the market. For him information technology is a boon and his best friend, for others ,like my aunt who chose sarees over stocks ,it is a modern way of losing money and another reason for calling stock trading as gambling while in reality it is just another arena for the analytical minds to prosper.

                                                                                                                  - Sarath Chandar

chandarsarath91@gmail.com