MUMBAI: Stock trading through mobile phones is fast picking up across the country as the increasing popularity of smartphones has made it simpler for investors to execute trades through the device. Turnover through mobile trading as a percentage of turnover clocked by retail investors, who mostly use smartphones to trade, has almost doubled in the last two years, according to an ET study.
Almost 30% of trading by retail investors in the cash segment is taking place through mobile phones. In futures and options, about 35% of the retail activity is happening through such apps.
“Many a days, a quarter of the trades is happening through mobile platform,” said Chaitanya Shahare, head-products, IIFL Markets.
Brokers say the highest growth in mobile phone trading is from smaller towns, mainly where there are no branches.
Out of the 7,00,000 downloads of IIFL’s trading apps in the last one year, majority has been done from the tier-2 and tier-3 towns.
Market regulator the Securities and Exchange Board of India (Sebi) allowed brokers to launch mobile trading in August 2010. The average daily turnover through mobile trading on the National Stock Exchange (NSE) in the cash segment has jumped to Rs 600 crore in the last two years. That is about 3.2% of the total turnover. In June 2014, it was less than 1% or Rs 116 crore. Brokerages attribute the trend to the growing usage of smartphones.
Geojit BNP Paribas Securities has seen an 85% growth in mobile trading turnover in the last two years. “Today 28% of our cash transaction and 35% of the F&O trading are done through mobile application,” said A Balakrishnan, technology head, Geojit BNP Paribas. “The numbers are increasing rapidly as more and more users adopt smartphones,” he said.
Trading through smartphones is more convenient for investors unlike the conventional route of getting trades executed through brokers or relationship managers. Brokers say retail investors enjoy the anonymity and speed of trading through their own smartphones.
The outlook for mobile-based trading appears to be rosy with brokers expecting such trades to contribute around 50% of their total trading within a year or two. “Currently, we get close to 20% of our daily turnover by volume from mobile and we expect this to increase to 40% by 2017 and later grow to 60%” said Vinay Agrawal, CEO, Angel Broking.
Kamlesh Rao, CEO, Kotak Securities, agrees that the mobile trading should see robust growth over the next one year. “Mobile trading is one of the fastest growing business segments. I expect web-based trading to remain flat for the industry over the next one year, but mobile trading should see a growth of 30-40%.”
Brokerage fees on trades done through mobile trading is cheaper than those executed by the brokers. For instance, Angel Broking offers a discount of 20% for trades done through their mobile app and online platform. “With massive mobile penetration across India, mobile trading is going to change the broking industry forever in a positive way, introducing more people to stocks at a fingertip and disseminating more information than ever,” said Shahare.