Rise Of Zero Commission Trading: Disrupting The Brokerage Industry
Just like the brokers, online trading platforms charge commissions or brokerage fees. However, there are now platforms that enable commission-free trading across asset classes
By Sarvjeet Virk
While for some people, the day starts with a cup of piping hot tea and newspaper, for others, it kick-starts with an adrenaline rush, anxiously waiting for the markets to open at 9 am. This has been true for traders across generations. However, they have come a long way from calculating the price changes daily by pen and paper to managing every aspect of the mobile app. But there's more! Earlier, high brokerage rates (in the form of charging a percentage of their transaction value or a fixed fee per trade) cost the traders immensely and ate into their profits or magnified their losses, as the case may be.
However, with the evolution of the internet and rapid digitisation, the emergence of online trading platforms has transformed the market with their innovative ideology of zero commission for trading. Technology is pivotal in modern-day trading, enabling investors to make informed decisions through AI and ML-driven algorithms and readily available market price and performance data.
The new-age zero-commission trading platforms leveraging AI
Just like the brokers, online trading platforms charge commissions or brokerage fees. However, there are now platforms that enable commission-free trading across asset classes. The emergence of zero-commission trading platforms has been linked to technological advancements and the need for innovation to thrive in the competitive financial industry. Cutting-edge technologies, especially Artificial Intelligence, have been a blessing in disguise for the financial market.
AI is an essential technology for various zero brokerage trading platforms today, enabling quick and seamless data gathering in real-time. The technology helps the new-age platforms analyse the captured information and process the comprehensive data into complex algorithms. AI further possesses the power to make predictions based on its learning and transform these into actionable insights, allowing traders to make wise investment decisions.
Picking top stocks daily, evaluating their opening prices and comparing them to depict the performance of the stocks in a glance through a graphical representation is a diverse application of AI in these platforms. The technology can predict the movements of scrips based on extensive data research and identify the best investment opportunities for investors. It can also analyse, model and predict financial markets. Colour-coded signals powered by AI can further help track market movements and enable trading decisions with just a click. Having said this, human expertise is still needed, and technology, along with human intelligence and predictions, is helping traders significantly.
The zero brokerage trading platforms disrupting the financial market
The new-age platforms have truly revolutionised the traditional trading model by eliminating brokerage fees altogether. They have ushered in a new era of financial inclusivity, offering traders user-friendly interfaces and cost-effective trading options. How? Investing small amounts of capital has become much more viable now without brokerage fees. The zero commission concept further empowers investors to take control of their financial journey and promises amplified profits.
Platforms offering zero brokerage services have ensured greater accessibility within the industry and removed barriers to investing. They provide diverse markets to explore for investments, ranging from equities and commodities to currencies and derivatives and offer easy navigation for new investors to begin trading. Investors today also have flexibility in trading securities, with these platforms offering advanced features of real-time market data, research and analytical tools. They work with transparency, providing clarity to investors on costs and charges, further facilitating long-term relationships.
Today, retail investors trade with a modern approach, and the new-age trading platforms empower them to actively participate in financial markets, further leading to increased market liquidity.
To sum up
Zero-commission trading platforms are the norm in the global markets. India is now catching up, offering similar zero-fee apps to build higher financial inclusion. Low costs resulting from zero-commission trading build confidence amongst the early investors to move from segments like mutual funds to the stock market. Furthermore, such value-driven zero-commission trading platforms prioritise the investors’ financial interests and empower them with profitable trading options. By providing zero brokerage across various asset classes and other benefits of cost-efficacy, flexibility, accessibility and inclusivity, they are disrupting the financial landscape and are even paving the way for the democratization of trading.
A record was hit last month when 3 million new Demat accounts were opened, taking the total count to 123.50 million. As per the Central Depository Services Limited (CDSL) and National Securities Depository Limited (NSDL), this has been the highest number since January 2022 and approximately 50 per cent higher than the previous 12-month average of 2 million. The surge shows a positive market trajectory and indicates the entrance of new retail investors who increasingly prefer the new-age zero-commission trading platforms for trading equities across multiple asset classes. The inclusion of such platforms on a national scale is not just beneficial for the country’s financial landscape but rather an opportunity for Indian investors to start building portfolios and step into the trading world with confidence.
The writer is the co-founder and MD at Finvasia.
[Disclaimer: The opinions, beliefs, and views expressed by the various authors and forum participants on this website are personal and do not reflect the opinions, beliefs, and views of ABP News Network Pvt Ltd.]
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