A broker is agents that are trained and certified to participate in the stock market. Stockbrokers work as agents for buyers and sellers of securities and charge commission for their service. The stockbroker does not have the securities but only does the service for the investor. The securities brokerage firms play a double role as principal and agent.
It is better for investors to consider the following points before making a decision.
- A full-time broker or discount agent: Generally, a full-service broker will charge a proportion of the commercial value. Majority of discount brokers charge a permanent amount regardless of the number of transactions made by the investor.
- Online operations versus off-line operations: Depend on the level of comfort of the investor; actions can carry out online or offline. Brokers can provide service by phone or physical location. The main brokers are accessible online and can be accessed through the Internet using a desktop/laptop computer. However, people with technical skills may prefer to trade online and those who would not be fond of to choose local brokers.
- The frequency of negotiation: People, who frequently deal, for example, rarely in a month, can make sure they have good returns if they hire a broker. Those who trade only a few in a year may not profit significantly from using the services of a stockbroker.
- Investment advice: to invest prudently, the financial information of a reliable stockbroker is a necessity. It is better to do various researches on the stockbroker before committing to them for their services.
The discount brokers india charge a high payment for their services. Now, each person can have access to the stock market, with the help of the discount brokers. Discount brokers are agents that buy and sell shares at a small rate. They execute related services of a stockbroker, except that they will not offer any investment advice.
Discount brokers charge their investors in the following way:
- Fixed price per operation: the charges are permanent for every transaction, regardless of its size. These charges are generally small and between from Rs. 9 to Rs. Twenty.
- Monthly rates: depending on the services demanded by the investor, a permanent monthly fee is chargeable. Depending on the service payment, unlimited trading plans are selected segments. Discount brokers such as RKSV and SAS online have very aggressive boundless trading plans starting at Rs.999.
A discount broker is used to buy and sell securities at a lesser rate. A discount broker is perfect for investors who trade regularly but do not need investment recommendation and have smaller portfolios. Compare that to a full-service brokerage, which suggests financial planning, advisory and wealth management services. Discount brokerages generally recommend sophisticated online trading platforms that allow customers to order financial products like stocks, bonds and commodities. This kind of trade is regularly threatening for novice investors. A discount brokerage, such as a traditional brokerage, must be registered with the Securities and Exchange Commission (SEC) and be a part of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation. There are also discount brokerages that propose insurance products. They usually charge unique rates and do not offer advice, so they are less costly as compared to typical insurance brokerage.