A Critical Study On Understanding the Risk and Opportunities for Investors Trading in Mobile Apps

Abstract

Mobile trading apps have revolutionized the way investor’s trade securities. The ease of access, convenience, and the ability to trade in real-time has made mobile trading apps a popular choice for investors. However, with the growing popularity of mobile trading apps, there are also inherent risks. This paper aims to provide a critical study in understanding the risks and opportunities for investors trading mobile apps. The study aims to identify the advantages and disadvantages of using mobile trading apps, assess the potential risks and challenges that investors may face when using these apps, and provide recommendations on how to mitigate these risks. The study will focus on analyzing the advantages and disadvantages of mobile trading apps and their impact on the investment industry. The study will also explore the potential risks and challenges that investors may face when using mobile trading apps, such as security risks, user errors, limited functionality, and distractions. Convenience and Accessibility Mobile trading apps offer a significant advantage over traditional trading platforms by allowing investors to access their accounts anywhere, anytime. This convenience has encouraged more investors to engage in trading, leading to an increase in trading volume. Cost-Effective Mobile trading apps have reduced the barriers to entry by eliminating the need for investors to have a large amount of capital to start trading. Additionally, some mobile trading apps offer commission-free trading, reducing trading costs further. User Errors Mobile devices have smaller screens and the user interface may differ from traditional trading platforms. This can lead to user errors such as placing incorrect orders or selecting the wrong asset, leading to financial losses. According to a report by the National Stock Exchange of India (NSE) for the quarter ending December 2021, the total number of active mobile trading users increased by 9% compared to the previous quarter.

The report also noted that mobile trading accounted for 14.7% of the total trading turnover on the NSE, up from 12.7% in the previous quarter. Investors incurred financial loss while using mobile trading app and also it relates to their time spend on the trading screen. Most of the responded agreed to the market risk more than other risk associated in trading and fluctuation of price in real time. Overall, mobile trading apps offer a promising future for investors, but caution and diligence are necessary to minimize risks and maximize opportunities.