Discount Stock Brokers
In recent years investing in the stock market has become easy and accessible. In the past, investing was complicated and expensive. To buy stock, an investor needed access to a broker. Brokers would charge substantial fees and would place buying orders directly to the stock exchange. With the advent of the digital age and the internet this archaic model has been replaced. Investors have more tools, more efficiency, and more control over how and when they invest. Automatic limit purchases, streaming stock data, and other on-the-fly reporting has made day trading and short window option purchases possible. Gone are the days of checking your stock in the newspaper or hearing your stock price reported on the radio.
Now that we've arrived in a new age of investing the question becomes "How do you choose a discount stock broker?". Other questions you might have are "Do I need all the features more expensive brokers provide?" "What are the major differences between expensive and low cost brokers?" With that in mind lets explore the major areas of difference between online brokers.
Trading Costs - You can expect to pay anywhere between $25 and $3 for each trade you make. Some brokers reward buy and hold strategy by making the purchase of stock very cheap and the sell of stock more expensive. This allows
Fees - This is one area that really differs from one broker to the next. If you have an established trading pattern it is well worth your time to find a broker that works with your habits. If you are opening an IRA look for a broker that has no maintenance fee or inactivity fee. Some brokers will pay part or all of your transfer fees if you switch to them. The more expensive non-discount brokers will charge you if you sneeze. Gone are the days of paying too much for the exact same service. If you are a mutual fund trader look for brokers that provide a fair rate on those trades. If you day-trade or dabble in options check your contract fees and trading fees. If you require a margin account find what the interest rate will be on each of the accounts and the dollar amount you'll need for the best rates. The best advice here is to look around. You can do a lot of research in a small amount of time online.
Research - Timely thorough research helps build winning portfolios. Some research is extremely expensive. Some of the higher priced brokers provide premium research and reports for free. These same brokers also require a minimum balance and charge you every time you blink. With a down economy and the stock market at fourteen year low paying extra fees can add even more pain.
Trading Tools - Each broker provides a different and more customized set of tools for their customer base. Look closely at the tools and some of the limitations of each. One broker might provide a better tool but might have features that seriously handicap your trading style. While every broker might have the same tool the tools functionality might be completely different. Try to setup a test account in a few of the most interesting brokers and find one that works for you.
Discount Stock Brokers