What is trading and Role of brokerage firms

Role of brokerage firms

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For a beginner it becomes very difficult and discouraging to trade in market but if one gets a little bit of knowledge and instructions to safely invest, anyone can easily invest in the trading market. It is a good way to earn income on savings and preparing for one’s future requirements even while working and also after retirement. A broker or a brokerage firm helps to facilitate trading by buying or selling of financial securities between buyer and seller. They act as an intermediate between both of them and their work is to research on market to recommend its clients and also offer marginal loans for investments.

A firm that charges a relatively small commission while asking its customers to perform trades via automated, computerized trading systems rather than by having an actual stockbroker assist with the trade is an online discount broker. Most traditional brokerage firms offer discount options with heavy competition to attain client weight age as people prefer more online trading today. Other ways to lower these commissions can be reduced for brokers by purchasing combined orders from many small investors to trade at specific intervals of time during a day. Since investor money is collected before stocks are bought or sold, it enables investors to contribute small amounts of cash with which fractional shares of specific stocks can be purchased which is usually not possible with a regular stockbroker.

How to choose the correct brokerage firm?

There are various ways to invest money including shares, mutual funds, commodity, NIFTY future, equity, etc. To identify difference between brokers and to choose best according to your needs is the requirement for the investors. Many criteria have to be considered while selecting broker. These include:

  • Choosing a broker with lowest deposit according to your needs, requirements and money investing capacity.
  • Requesting broker to give their previous reports to analyze their work and accuracy before deciding who to choose.
  • Membership of NSE or BSE of the broker should be checked with broker being registered with SEBI (Securities and exchange board of India) too.
  • Quality of service should be checked.
  • Reviews and ratings of online brokers should be checked before investing as precaution is a must to prevent forgery or loss of money.
  • Brokerage charges should be at a minimum to enjoy the benefit of least brokerage online trading in India.

Types of Brokers:

The brokerage comparison will help to identify the best broker service in market as well as skip the market risk factor. There are three types of Brokers: Discount brokers which deliver their services at lowest brokerage to gain the largest profits on your investments. The second one being full service broker which provides best assistance on trades and are a great support but demand higher brokerage rates. These provide the best Demat account opening facilities. The last one being stockbroker in 3 in one account facility where online trading account, Demat account and Bank account can be worked for investments on the same platform.

Online brokerage firms are generating good trust among the trading community with their swift customer care services. They provide the assimilated commodity, currency, equity and mutual funds and other investment platforms with the minimal brokerage charges. The discount broker firms are the best options to earn money by the several investors as they work on best low cost brokerage rates. They are useful and cost effective for both experienced and naïve clients.

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