When you are opening an account for stock trading the brokers ask whether you want to open an online or offline account, many people get confused because they do not know the difference between the two. In order to remove their doubts given below is the difference between online and offline trading –
1. Trading
In online account the client himself or herself can trade in stock whereas in offline account only broker can trade in stock according to instructions given by the client, therefore an individual is dependent on brokers for execution of orders in offline trading which is not the case with online trading.
2. Convenience
Online trading account is best suited for those individuals who can track the stock market from their office or home, while for people who do not have internet facility at office or their office blocks stock market websites than offline trading account is best suited for them because they can give orders on phone and broker would place those orders.
3. Fraud
In online trading account there are no chances of fraud as it is you who has complete control over your transactions while chances of fraud increases if you have offline account because some brokers tend to trade at their discretion without taking permission from client which may lead to losses to the client.
4. Expertise and Knowledge
If you do not have any knowledge about stock markets then an online account can be risky because you may end up buying a stock on impulse without doing proper research, whereas in offline account since a broker has been doing trading for years he or she have more knowledge and therefore can give you proper guidance and hence help you in taking the right decisions (however investor should be cautious as sometimes brokers tend to give biased opinion).