Although the amount is negligible, when compared with the total turnover in the cash market, market players are optimistic about the growth of Internet trading.

The percentage of Internet trading, when compared with total turnover, has also been moving upward during this period. From a meagre figure of 0.006 per cent in April it has moved up to 1.17 per cent in November.

Speaking to The Financial Express Refco-Sify Securities managing director Vineet Bhatnagar said, "In the next one-and-half year the market should see an explosive growth in Internet trading with the retail market catching up with this mode of trading. After 18 months, as much as 10 per cent of daily trading volumes on principal exchanges is expected to be put through Internet."

One of the major reasons why Internet trading is not picking up rapidly is infrastructural bottlenecks. One of the pre-requisite for Internet trading for retail investors is the availability of all information at the fingertips and the speed to execute orders at exchanges. For successful Internet trading one should not rely on dial-up connectivity but use alternative cost-efficient faster access mechanism.

Another bottleneck is the lack of awareness of the new medium as a cutting edge tool to retail traders. This could allow the investors to take faster decision and quicker execution.

"The technology platform used for Internet trading has to be robust and time tested so that when volumes grow these platforms are found to be scalable without compromising on performance," added Mr Bhatnagar.

Cost reduction would be the key factor which would entice more investors towards Internet trading. Traditionally full service brokerage charges were the highest, whereby brokers provide research, execution and support.

The other category is that of a discount broker whereby the services provided the broker was restricted to execution of trades only. This is the cheapest in terms of charges.

The online brokerage service could be a hybrid of the the two, whereby the execution services are provided coupled with research inputs and trades ideas.

In the online mode, the cost of providing these services are dramatically reduced since the communication costs are negligible, monitoring of the trading activity is done by systems and research can be distributed without negligible costs.

Since the customer has to pay the margins upfront, the broker does not need the client positions. This makes a great difference in the cost structure for the broker and the benefit is passed on to customer.