An apparent advantages of discount brokers are that this sari unbiased. Since they cater no advice, they shall not make you sell a good stock or at the same time, compel you buy one. The thing is you would take decisions according to your thinking and preference and they would only assist you.
It would be right to say that discount Broker is the answer to high transaction price plaguing the financial sector. A discount broker is a no-frill broker such as a low cost airline. All the broker does is cateringthe platform for transaction and the services that are necessary to complete a transaction. The near rock bottom brokerage cost does make a lot of difference for a client. Research or stock calls these days are there in plenty on the internet or via newspapers, periodicals and that of websites. Then there are also many paid newsletters and content providers who get you the trading and investing ideas. These are done at a fixed charge. Once you start looking for Discount Brokerage services you would come across good options!
What is the difference between discount and full time brokers?
The difference between a discount broker and that of a full service broker is reflected by the transaction price on low cost stocks or on options trading. Various brokerages charge a minimum amount for stocks below a precise price. Their goal is to defend their brokerage in absolute terms as low priced stock would give them minute brokerage if they are calculated in terms of percentage. Similarly in options trading thatare usually low priced, mainly out of the money options) many brokerages have a flat amount every single contract. This technique of calculating brokerage has a large impact on the success of the client.
Another apparent advantage of the discount broker is that they are impartial. Since they cater no advice, they will not make you vend a good stock or at the same time, force you to buy one. They will not trouble you with their research calls and remind you of all the trading calls that clicked while suitably brushing recommendations behind the curtain that did not perform really well.
You know what Indian financial markets have experienced a drastic change for the great over the past decade. Electronic trading has not just brought transparency in a business that was infamous for opaqueness but has also brought down price. Internet trading has taken the transparency and price parameters to a freshly new level. Internet trading has also fetched in a set of brokers who cater reduced rates for transactions. These are known as discount brokers in industry phrasing.
A broker does charges brokerage for offering a platform to transact. Conventional brokers charge higher brokerage as they claim to cater value addition by catering research calls. Though a conventional broker might sound compassionate by claiming that his “well researched” calls are generated by a huge team of highly educated and highly paid analysts with fullaim of helping client increase wealth, the reality is rather different. A broker makes money only in case a client transacts. And more the client transacts, the better brokerage goes to the broker’s pocket.
So, since you know much about brokerage and how brokers work, you can make a decision!