When talking about stock marketing, investing, buying and so on; there are varieties of things that have to be kept in mind. Most of the people take assistance of professional brokers when they get into stock marketing. These brokers are the middlemen when it comes to purchasing and vending stocks. These fellows handle your orders to purchase or sell a particular stock.
There are mainly two types of brokers Discount brokers and fulltime brokers. The former brokers get you all the information and give you proper guidance without any additional charges. However, talking about thelatter one, they facilitate things for you and might charge you for even the things that you weren’t needed. Anyhow, it is a personal choice of a person whether he wants to go for former or latter.
These brokers offer a platform for transaction and the services that are necessary to complete a transaction. The difference between a discount one and a full-service broker is reflected by the transaction price on low-cost stocks or on the alternatives trading. There are many brokerages who charge a minimum amount for stocks below a specific price. Their purpose is to guard their brokerage in absolute terms as low-priced stock might give them tiny brokerage if they are calculated in the terms of percentage. Similarly, in the options trading (that are generally low-priced, mainly out of money options) various brokerages have a flat quantity per contract. This technique of calculating brokerage has a huge impact on the profitability of client.
Another benefit of a discount fellow agent is that they are unbiased. Yes, it is simply because they offer no advice. They won’t make you vend a good stock or at the same time, make you purchase one. They are not going to bother you with their research calls and remind you about all the trading calls that clicked while easily brushing recommendations behind the curtains that did not perform.
You know Indian financial markets have gone through a drastic change for the good over past decade. Electronic trading has not only fetched transparency in a business that was infamous for opaqueness but it has also brought down cost. Web trading has taken the transparency and payment parameters to a completely fresh level. Internet trading has also brought in a set of brokers who cater cheap rates for transactions. These are the fellows who are called discount agents/brokers in industry parlance.
A broker charges brokerage for catering a platform to transact. The traditional brokers charge higher brokerage simply because they claim to cater value addition by providing research calls. Though a traditional broker might sound kind by claiming that his well-researchedcalls are generated by a large team of highly educated and more significantly highly paid analysts with sole aim of helping client increase wealth, the reality is quite different. A broker makes money only if any client transacts. And the more a client transacts, the better brokerage goes to the broker’s fund. Brokers usually have differing rates of brokerage that depends on the client and quantum of trading.
Thus, it would be a sensible move to step in the world of stock marketing with professional brokers.