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[L394]List Of Stock Brokers

by Conan, Con

The fact is, only a registered (SEBI) stockbroker can buy and sell shares in the stock market. Such an individual isregistered on one or many stock exchanges and is authorized to transact onbehalf of others. Apart from that, an online stock broker is very valuable toinvestors who are not technically inclined and have no or little priorknowledge of stock trading. Such investors can use their own online stocktrading accounts to obtain necessary information and place online trades at anytime of the day. Others, however, still require a human interface - a realperson who will place trades on their behalf.

An online stock broker's (online service ofstock broker) services definitely transcend the traditional format of tradingin stocks personally or via the telephone. By using an online , theinvestor no longer faces the constraints of location and busy telephone lines. Informationtechnology has made stock market software reliable means of trading in stock onthe Internet, and an online stock broker uses this on his client's behalf. Anonline stock broker requires considerable working knowledge of the stock marketto help investors trade in stocks. Though they are independent of establishedbrokerage firms, they are still bound by the same SEBI regulations that govern offlineas well as online stock firms. They have in-depth experience in dealing withactively traded commodities and stocks.

By using such a stock broker, one gains greateraccess and can also save money on stock trades. Because of this, there are nowmany investors in the stock market than there have ever been previously. Thereare now any number of investment choices available, and online brokers canleverage these by the power of the Internet coupled with their own expertiseand experience. There can be occasionalhiccups while using the services of one's online stock broker. For instance, theaccelerated growth of can cause busy servers at certain times ofthe day. This makes it difficult to log on to one's broker's website. This isnot a serious limitation, and invariably applies only to the first and lastthirty minutes of a stock market day. Even this limitation will become historyas online trading matures. The most successful traders often have as many as fouror five brokers, though a single reliable broker suffices for those who onlytrade occasionally.

Full-Service Brokers

"Full-service brokers" offer a variety of ways to help clients meet their investment goals. These brokers can give advice about which stocks to buy and sell, and often have large research departments that analyze market trends and predict stock movements, for their clients.

Such services are not free, of course. Full-service brokers charge the highest commission rates in the industry. Your decision whether to use a full-service broker will depend on your level of self-confidence, your knowledge of the stock market, and the number of trades you make regularly.

Discount Brokers

Investors who wish to save on commission fees generally use discount brokers. Brokers in this category charge much lower commissions, but they don't offer advice or analysis. Investors who prefer to make their own trading decisions, and those who trade often rely on discount brokers for their transactions.

Online Brokers

Taking the discount concept 1 step further, online brokers are the least expensive way to trade stocks. Both full-service and discount brokers usually offer discounts for orders placed online. Some brokers operate exclusively online, and they offer the best rates of all.

Account Requirements

Whichever type of broker you choose, your first order of business will be to open an account. Minimum balance requirements vary among brokers, but it is usually between $500 and $1000. If you're shopping for a broker, read the fine print about all the fees involved. You'll find that some brokers charge an annual maintenance fee while others charge fees whenever your account balance falls below a minimum.

Cash Or Margin?

Brokerage accounts come in 2 basic types. The "cash account" offers no credit; when you buy, you pay the full stock price. With a "margin account," on the other hand, you can buy stock on margin, meaning the brokerage will carry some of the cost. The amount of margin varies from broker to broker, but the margin must be covered by the value of the client's portfolio.

Any time a portfolio falls below a specified value, the investor will have to add funds or sell some stock. A greater opportunity exists for realizing gains (and losses) with margin accounts, because they allow investors to buy more stock with less cash. Involving greater risk than cash accounts, as they do, margin accounts are not recommended for inexperienced traders.

Selecting The Right Broker For You

You should carefully consider your needs as an investor before making the choice of a broker. Do you wish to receive advice about which stocks to buy? Are you uncomfortable making trades on the Internet? If so, you will be best served by a full-service broker. If you are comfortable buying on the Internet, and you have the knowledge and confidence to make your own trading decisions, then you will be better off with an online discount broker.

After deciding which type of broker you want, do some comparison-shopping between competitors. Significant cost differences can show up when you factor in all the annual fees and brokerage rates. Estimate how many trades you expect to make in a year, how much cash you can deposit into your account, whether you want to use margin accounts, and which services you need. Armed with this information, you'll be prepared to compare your actual costs for various brokers, and to make an educated choice.

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Both Conan & Ron King are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Conan has sinced written about articles on various topics from Forex Online, Investments. Stock Broker employed with a leading Brokerage firm in India. To read more about Online Trading with Stock Brokers click .. Conan's top article generates over 4400 views. to your Favourites.

Ron King has sinced written about articles on various topics from Acne Treatment, A Secured Loan and Aging. Visit to learn more. Ron King is a full-time researcher, writer, and web developer. Copyright 2005 Ron King. This article may be reprinted i. Ron King's top article generates over 368000 views. to your Favourites.