How To Choose An Online Stock Broker?
Stock Brokers are an inextricable part of the investing world. When you talk about investing in the stock market, you cannot avoid stock brokers. They facilitate the buying and selling of stocks on behalf of investors because it is not possible for investors to buy the stocks directly from the stock exchange. Therefore, it is necessary to choose a proficient brokerage firm.
They are the key consideration for stock trading. Your requirement of brokerage services may be varied depending on which path of investing you want to follow. If you want to try for an IPO investment, you need a brokerage firm with the required facilities.
The importance of stockbrokers increases more when they offer valuable advice regarding investment so that you can align with your investing goals. So, here are the factors you should consider when choosing a stockbroker.
Key Considerations to Choose the Right Broker
1. Trading Cost
You should go for brokerage plans as per your trading needs. It can be premium or basic as per your requirements. As a beginner, choose the least possible brokerage fee.
You should opt for a brokerage firm that charges a flat brokerage rate per trade, irrespective of the trading volumes.
It is the cost per trade that is of paramount importance. Do not consider it as a single cost because brokers have assorted brokerage fee structures that you should focus on.
If you are an options trader or prefer mutual funds and trade volumes are higher, the brokerage commissions will be low like Rs. 10 – Rs. 25 per trade apart from the SEBI fees and Securities Transactions Tax. If you are looking at delivery based trading on stocks, the fees could be in the form of percentage brokerage or flat rate per trade.
2. Platforms and Tools
The right trading platform and tools are one of the most important considerations to execute desired trades at the desired time. Every broker provides mobile apps for trading. Make sure it is not confusing and complex to use, especially when you are a beginner. Ensure about security. Brokerage websites or apps must follow the strict authorization process.
3. The Account Opening Fee and Minimum investment
If you are a beginner, try to open Demat account and trading account with little or no investment capital. A minimum initial investment with brokers may be many thousands. Make sure to check the minimum investment amount and account opening charges before you decide to open demat account.
There are some discount stock brokerage firms which provide free Demat and trading accounts with zero account opening charges.
4. Trade Diversity
Choose a broker which provides the facility of trading in different investment options, especially if you want to spread your investments or invest in an Initial Public Offerings (IPO). Not all brokerage firms have the ability to invest in an IPO. A good broker will allow you to trade in Stocks, Bonds, Mutual Funds, IPOs, ETFs, Futures & Options.
5. Advisory Services and Researched Database
Stock Brokers are experts. Besides, advising about the performance of stocks, market trends, etc they may offer a database of stock research findings, research reports of companies and hence, plays an excellent role as an investment advisor to their clients. Ask them about what kind of advisory services they have. Some of them offer stock market educational portal facilities also.
6. Customer Support
Make sure a brokerage firm offers great customer support. If it is available for more than just trading hours, you can be assured of best services. Check for email and live chat support because you may be busy during regular trading hours and may not be able to make a phone call.
Several times traders need assistance from customer support to execute a trade. They must provide a call and trade facility. Check for response time for queries about technical complaints.
The Bottom Line
There is no sure fire-way for returns in stock trading. However, investing journey can be hard without professional advice. Do not twist and tailor your investment portfolio haphazardly. Ensure it’s done in the right way and at the best possible cost by using professional discount brokerage services which charge a flat brokerage rate per trade.