For the trading or investing in the stock market one needs to have demat and trading account. These accounts can be opened with any of the stockbrokers who are authenticated by the SEBI. However, one needs to know his role before opening an account with him. It is very clear that a discount broker is, in reality, a stockbroker who performs sell and purchase orders by charging a fraction of commission. Nevertheless, the discount broker does not extend any advice about investment, dissimilar to the traditional or full-service broker. When there was no technology available it was only rich people who were in a position to appoint a broker and dig their heels in the stock market. On the contrary, the internet has altogether changed the entire scene of the market as it made the discount brokers to take the industry by storm and facilitate the trade for people with small capital with minimum fees.
The inevitability of a Discount Broker
Consequently, the discount brokers do the trade at reduced costs and they normally carry out orders in favor of their customers. These brokers never extend advice, personal consultations, tax planning, research and services for estate planning in favor of their clients. Since they do not offer any added services regarding money management, the discount brokers do charge fraction of fees due to the reason that they never squander away money by closing deals with persons who are high net ones. In addition, they mostly now perform their business online.
You need a discount broker or traditional broker services, depends on your proficiency and awareness, financial objectives and requirements, and your recent financial position. It is quite vivid that commissions usually eat away a big portion of your trading returns and investment that is why many people decide to choose products that are presented by the discount brokers.
Traditional or full-service brokers
It is the best choice for investors who are in need of expert investment advice or are interested in staying at the peak of the financial planning. On the other hand, the discount brokers are specially fit for the traders and investors who dynamically sell and purchase securities on a regular basis. Also, the investors who regularly do trade particularly get benefitted by the low commissions that are offered by the discount brokers. Some investors who are not in need of advice possess small portfolios or merely wish for execution of their trades are satisfied with the use of discount brokers.
A place to look for a Discount Broker
As you go by the securities industry, the discount brokerage houses offer the customers their individual accounts. Such investors do not come in contact with the live broker. By chance they happen to interact, it will be very short and meant only for the benefit of trade. The facilities proffered by the discount brokers are structured for independent investors and traders who are self-directed. They have made their electronic platforms for trading in such a manner that are advantageous and quite attractive to active investors.