The following steps are involved in online trading:

(i) Registration Before online shopping one has to register with the online vendor by filling up a registration form. In this form one has to give a password to protect the account otherwise anyone can log in your account.

(ii) Placing an Order : In online transactions the order can be placed by picking and dropping the items in the shopping cart. Shopping cart is an online record of what you have picked up while browsing. After being sure of what you want to buy then check out from shopping cart and choose your payment option.

(iii) Payment Mechanism: In an online purchase payment is made through

(a) Cash on delivery

(b) Through cheque

(c) Net banking transfer

(d) Credit or debit card

(e) Digital cash [Note If they ask steps in e-trading then following steps are to be mentioned]

(1) Opeaning bank ale

(2) Opeaning demat account with a depository participant

(3) Opeaning online trading account with stock brokers

(4) Trading software installation

(5) Bidding and trading in securities

(iv) Digital cash : Digital cash is a type of electronic currency which is found only in cyberspace. It has no physical real properties but still can be used as a real currency in an electronic format. The amount equal to the digital cash which the buyer wants to get issued in his favour, is deposited by him in the bank dealing in digital cash through cheque, drafts, etc. The bank sends a special software to the buyer. Hence, while making online purchases, the buyer can make the payment by drawing digital cash from his account with the bank.