As an investor in the stock market, if you think that you do not need too much of hand-holding and you can do your own research, trading through a discount brokerage is the right option for you. Discount brokers offer to conduct the stock trading for you without providing you with financial advice and without influencing your investment decisions. The most important benefit that you derive out of investing though a discount brokerage is that they charge considerably less than the usual full-service brokerages. If new to the stock market, it is always advisable to go for ?full- services, as this helps you to take wise decisions and gain from the insights of an experienced broker. As you become more conversant with the market and its trends, there is not a better option than a discount brokerage.



How do discount brokerages offer their services to you at a very low cost? Actually, they offer services in bulk and make profit out of the volume of transactions made. It does not mean that they leave you alone. Most good discount brokerages have walk-in offices in your city to help you out and provide you with brokerage analyst and S&P reports. These reports give you an in-depth understanding of the market scenario and the competitive positioning of the various companies in the market. This kind of data is difficult to get access to if you do it at an individual level.

Other advantages include 24/7 helpline services to help you out with your transactions and online transaction systems that helps you to carry out trading sitting in your home. Moreover, whatever decisions that you make about the transaction is your own; you don't have to rely on someone else's discretion to invest your money. Whatever the outcome ? profit or loss ? it is in your credit.

Discount brokerages can be distinguished into the following categories according to the kind of services they provide and the rate they charge:

1.?Full-Service Discount? firms

These are renowned brokerages providing services at half the cost of the normal brokerages. They make money out of the sheer volume of their business and you set to gain as you have to pay less.

2."Discount" firm

These firms are almost similar to the first category, but provide lesser services in terms of walk-in offices and research reports. They also charge less because of this.

3."Deep Discount" firm

These firms perform only stock and option trades at a minimal flat rate.

4.?Computer or Electronic?

Here, the brokerage services are only through computers and there is no direct interaction with the brokers.

However, before choosing a discount brokerage of any kind, it is advisable to understand your needs first and take a decision accordingly. As many firms do not have walk-in offices or do not provide you insights in terms of analyst reports, is it good to make a thorough research of the firm before engaging its services.