Algo trading & analytics to enable faster investments

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Stock market trading in India began in 1855 under a Banyan tree in Mumbai and later moved to Ring base trading in the BSE building. In 1990, trading transformed into an electronic screen-based system known as BOLT on BSE and NEAT on NSE. Today, India has become one of the world’s largest mobile-based stock trading markets, with anyone able to trade stocks from anywhere in the world using a smartphone. Indian capital markets are advanced and secure, following the rare T+1 settlement system where shares get credited to the investor’s demat account the next day.

An investor may create a trading cum demat account online in minutes with a few mouse clicks, trade from the comfort of their home without relying on their broker, obtain trading reports online, and raise inquiries online in a flash thanks to the seamless use of technology.

Technology brought transparency & security

The stock market has undergone a technological revolution that has greatly impacted trading. One of the main benefits of technology is faster trade settlement, increased transparency, enhanced security, automated surveillance, and more. Online trading apps have transformed the trading experience. They have made it easier, more convenient, and accessible by providing a better understanding of your money. These apps have removed the middleman’s role and allow you to trade at your fingertips.

AI has been a game-changer for the stock market. It uses quantitative trading with big data processing and machine learning technologies to provide real-time market analytics. Automated robots can analyze thousands of data points to execute trades at minimal prices and eliminate risks. This increases accuracy and provides a maximum return. The latest technological advancements offer faster and more secure transactions. Technology has increased transparency in the stock market. It has made it easier for investors to access information about the companies they are interested in. Financial statements, earnings reports, and other essential information about a company are now accessible with just a few clicks.

Automated surveillance systems can detect unusual trading patterns and alert regulators in real-time. Technology has made it easier for regulators to monitor the market for fraudulent activities. In conclusion, technology has made the stock market more efficient, transparent, and accessible. This benefits investors and regulators alike.

Role of fintechs

Fintech has played a significant role in transforming the Indian stock market. It has brought about a paradigm shift in the way investors participate in the stock market. Fintech has made the stock market more accessible, transparent, and efficient. Fintech has made investment management more accessible and affordable. It has enabled investors to invest in financial assets such as stocks, mutual funds, and ETFs (exchange-traded funds) with ease. Fintech has also made it easier for investors to track their investments and monitor their portfolio performance.

Predominance of Algo-based trading

The future holds a lot to make trading easier, with lots of domain knowledge. In 2021, approx. 20% of the total exchange trading volumes came from Mobile trading. Mobile apps like Moneycontrol, Stockedge, Quantsapp, Opstra, etc. have become very popular among traders who use them for a variety of market data and information to trade efficiently. The predominance of Algo-based trading nowadays has led to an exponential rise in trading volumes as it contributes more than 60% of exchanges’ volume.

Algo trading eliminates emotions and enables trades to be executed in milliseconds. Data analytics helps traders identify market trends, uncover hidden opportunities and analyze portfolios in real time. Fintech startups have transformed the stock market world and provided traders with a variety of technical/fundamental analysis software and data analytics tools. The use of APIs is growing rapidly, enabling two applications to communicate for more efficient trading. With encryption and other security measures, investors can be confident in the safety of their transactions.

Bot & voice trading for future

Technology has made a great impact on the trading world, making it more easily accessible, transparent, and secure. The use of technology has made the entire world a small village where traders can trade in multiple markets in various asset classes, just from their pods. The future belongs to voice command-based trading, bot trading, and the predominant use of AI in making logical investment decisions.

The author is Chairman, ANMI WIRC. Views are personal.