A stock trading app is a broker's app through which ordinary investors buy and sell shares, mutual funds, and futures and options on a stock exchange. It is also called a broking app or a trading app. A broker is a firm licensed by SEBI, the market regulator, to place orders on the exchange for its clients. You cannot buy shares from the exchange directly. You must buy them through a broker.
There are two kinds of broker. A full-service broker gives you a trading app, and also research, advice and a relationship manager. It charges more for each trade. A discount broker gives you only the app. It charges a small flat fee for each order, and sometimes nothing for buying shares that you plan to keep.
To start, you open two accounts in the app, in about fifteen minutes. You place orders from the trading account. The demat account holds your shares in electronic form. The app checks your PAN card and Aadhaar for KYC, the identity checks that every financial company must do. The app does not hold your shares itself. They are recorded in your name at a depository, the institution that keeps the official record of who owns which shares.
Consider an accountant in Nagpur who buys 20 shares of a company at ₹450 each. She adds ₹9,000 to her trading account from her UPI payment app. She taps Buy. The app sends the order to the broker's order management system. That system checks that she has enough money in her account, and sends the order to the exchange. Within a second, the app shows "Executed". On the next working day, the 20 shares appear in her demat account.
The same app also sells index funds and ETFs. It also lets clients trade futures and options (F&O). These are contracts on the future price of a share or an index. With F&O, a trader can control a large amount of shares with a small amount of money, so the losses can also be large. SEBI's studies found that about nine out of ten individual F&O traders lost money.
Many brokers add simpler tools for new investors. A paper trading mode lets a beginner practise with pretend money. Beginner investing apps reduce the choices to a few funds. Algo trading for retail investors runs an options strategy automatically.
Every such app must also follow SEBI's rules on investment advice. The app may show data and explain products. Only a registered adviser may tell you what to buy.