For those who prefer to trade in various shares of companies listed on the exchange, a trading and demat account are very important. One needs to check the service of a stockbroker before going for an account opening in the offline market. However, one must know what the role of a stockbroker is in the market, and his recommendations as well as advice that can prove helpful to the trader to have desired profit in any of the segment which is not restricted to the intraday segment only in cash option. He
One of the most common question most of the traders ask is if they really need a broker. For those of you, who have just stepped in this market – you surely need one. A stockbroker is needed to buy stocks and complete the required formalities and carry out the transactions. Stockbrokers act as a link between the stock exchange and client. He simplifies the situation in a way that the trader can easily understand.
Work Of stock brokers
A stockbroker does the following tasks:
- A stockbroker acts as a salesperson
- They work for a stock brokerage house
- They carry out the transactions
Common points about brokers
- The brokers are paid by commissions, salary or a combination of both.
- Not everyone in the stock market can be regarded as a broker. Stockbrokers have to qualify two licensing examinations namely Series 7 and series 63. All the best stock brokers have qualified these exams. Qualifying these examinations permits the broker to counsel you.
- The brokerage houses employ brokers that execute transactions and give stock related advice to the customers.
- All the brokers need to do some research work before they advise you. However, many brokers have research analysts who do this job for the broker.
Full-service vs. discount broker
Brokers fall under two categories- full-service broker and the discount broker. You can use any one of the two according to your need and taste. Here is a little description of the brokers which may be helpful for you to differentiate between the two:
The full-service brokers tend to provide a wide range of investment advice, financial products, and research as compared to the discount brokers. They also offer bonds, stocks, annuities, insurances, and derivatives. However, hiring a traditional broker can burn a hole in your pocket.
The advisory brokers or full-service brokers seek business and ask for commissions in return. They help you in each step of your trade and make out maximum profit from all the deals.
The discount brokers do not offer any research or advice. The main of these brokers is to simply help the clients to carry out the transactions. Opting for this broker can be an affordable and easy affair for you as it is a trade with no frills. The discount brokers are mostly available online and have a fixed salary. They do not ask for some extra commission. It is a transparent trading system as the broker who offers best services with lowest prices gets the majority of trades.