In
order to gain the most of your trading activities, you need to figure out which
among the broker classes suffices your requirements.
But in the market there
are numerous brokers and the choice of one becomes a difficult task. In the
quest of your broker search you need to figure out whether you want to go with
a full time broker or a discount broker. For some it could be the lowest
brokerage charges in India enabling you to take a decision.
Role of a discount broker
Availing
the services of a discount broker is a straight forward task as there are fewer
costs involved. They are basically there who are going to execute any trades on
your behalf. If you have an account with them it means that you might not be having
any personal interaction with them.
They are going to provide you with an
online trading platform from where you can place orders as per your
requirement. An online broker is going to automate those orders and undertake
the required transactions on your behalf. The best brokers in the business make
the process user friendly and as simple as possible.
The
main benefit that a discount broker provides over a full time broker is in
terms of commission structure. In fact the rates of commission is going to be a
lot lower than a full time broker and the main reason is that they provide you
with extra services.
There are going to be less in terms of traditional fees as
most of the discount brokers have low requirements in terms of minimum deposits
or trades. This is really important for traders who are starting off with low
levels of capital.
Many
discount brokers offer rebates if you go on to undertake a specific number of
transactions at a given period of time.
In fact these brokers work out to be a viable choice for an active
trader who undertakes numerous transactions on a daily basis.
Yes when you rely
on a discount broker you are on your own and there is no one whom you can rely
for any form of advice. The onus is on you to figure out the trading opportunities,
and figure out whether the planned goals align with your financial objectives
or desires.
At
the same time many discount brokers do provide you with a selection of online
tools that help you in research and trading activities. But in order to be using
these tools you need to be conducting certain number of trades or you might
have to shell out additional amount.
The fact of the matter is that if you are
comfortable with your own decisions without any assistance or paying low
commissions is of importance to you, then on all counts discount brokers work
out to be the best choice.
To
conclude the difference between a discount broker and a full time broker seems
to be an obvious one. But of late both fall into one category or the other.
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