Opening an online trading account is a step by step process which requires a lot research ad time to finally land up with a trading account. Don’t mistake opening of a trading account like any other account provided on the World Wide Web interface. Since trading involves investments comprising of buying and selling products, a certain amount of brokerage is charged. This brokerage charge varies with different brokerage plans provided by the firms. Before you start paying the charges to any random brokerage firm it is always better to compare brokerages.
To analyse the brokerage fee structure, it is necessary that you have a clear understanding that in which category of investor you fall in and also the kinds of brokers present in the market to aid your trading portfolio. There are investors who invest their capital for a long term. On the contrary, the short-term investors park their capital for a shorter duration of time. The brokerage fee is charged according to the services availed. The two main categories of the brokers are discount brokers and full-time brokers.
Since investments are completely associated with the market risk, deciding the time limit for the investments is entirely your call. Full time brokers are beneficial for those who want to hold on to their investments for a longer period of time.
Holding of stocks for a longer duration requires expertise, in-depth knowledge of the market and its trading patterns with correct execution strategy. On the other hand, discount brokers are beneficial for investors who have an inclination towards short term investments. As a day trader, you will seek out for brokers who will charge flat fees facilities on the transactions.
Share market is a busy platform where thousands of trades takes place in a day. With constantly fluctuating market conditions, your investments are always at the mercy of market’s overall performance. There are no set rules of how the market functions. Any major change on the domestic as well as international boundaries is bound to bring change in the market conditions.
A well-informed investor is never misled and hence it is important to keep your research work strong. Here are a few things that must be kept in mind while you are comparing on the brokerage fees charged by various firms:
- Market reputation of the stock broker
- Market research options
- Facilities offered
- Cost efficient quotient
Researching on the reviews of the stock brokers will help to frame an idea of which broker is worth approaching. Stock investment websites generally contain reviews about the stock brokers already operational in the market. The next step is to ensure whether the services provided to you are cost efficient or not. Charges like fees on opening of accounts, maintenance fee, transaction fee etc are charges that vary from firm to firm. Facilities such as investments in
Facilities such as investments in market fund or in IPO should be provided by the brokerage firms without any restrictions. Firms should provide an excellent user interface which is compatible with the latest software. Based on these criteria you can easily find the right broker for you and manage your investment portfolio.