Choosing An Online Broker

Choosing an online broker is an important decision just like in traditional trading you would consider your broker important. While you do not usually need the broker as much in online trading, that doesn’t mean you don’t have to pay any attention to who you use. There are many “discount” online brokers that simply do not have your best interests in mind.

You need to learn how to spot the brokers that should be avoided and how to properly select the
one that will work best for you. There are certain steps you should take when looking for an online broker or brokerage service that works for you.

Customer Service

You know that customer service is an important aspect of your broker when making trades on or offline. Nothing is more frustrating than not being able to talk to a live person when you have a problem or concern, especially with something that deals with your money. Even if you go with a basic discount broker that you won’t normally speak with, you still want to know where and what their customer service contacts are so that in the event you do need them, you can contact them immediately.

If customer service is important to you, you will want to avoid those brokers that don’t have a good, quality customer service system in place. If you care about customer service, you will want to search for a quality, easy to navigate website, phone numbers that give you live people and not just recordings as well as be sure you are provided with satisfactory answers to any questions you may have.

Once all of this is determined, one of the next things a person will consider are the fees involved with a particular broker.
Online Stock Trading Made Easy Online Broker Fees Broker fees are probably one of the first things you ask about when you want to choose a broker. But to make a good decision about whether or not a particular broker service is giving
you a good deal, you need to know what the fees are for in the first place. You need a breakdown of the online broker fees if you are to understand them and what they are all for.
It’s important that you know what the standard in fees are as well as what you are being charged for and why you need to pay the charges. This is important so that you are not scammed or overcharged.

There are many sites on the internet that offer you super-low prices on your trades. Be careful of discounts brokers, these are brokers that do not provide you with any advice about investments, but who will carry out any investment arrangements for buying or selling that you would like them to. There are called discount brokers, because they will do this for a discounted fee. Any extra services that they provide for you may cost you a large fee.

If you are new at investing it may not be a good idea to use this type of broker as you have noone to help you in your decision making. Someone who has enough trading knowledge on theirown already might be able to get by with using a service like this. If you are not prepared to do the research and leg work involved with investing then it would be wiser to use a full-service broker.

A full service broker will provide you with vital information that is needed to make a wise investment decision. They do the majority of the leg work that is involved and will give you their opinion on what they think would and would not be a good investment. This may or may not be helpful. Make sure to look into their personal track record so as to get a better feel of the quality of broker that you will be working with.

Of course, you will pay more for this service than you would for a discount broker, but if you are inexperienced investors it will be worth the extra fee. Below are some more tips you should know when considering broker fees from an agency
whether online or offline.

Minimal Fee

Most brokers have a minimal fee that they will charge for opening an online brokerage account.
These fees normally range between $5-40 per trade. It also depends on the type of trade and how it is made. For example, plain internet, non-broker assisted transactions will be cheaper.

There might also be a minimum to how many shares you need to purchase to lock in that quoted price. Make sure you always read the fine print to see if there are other stipulations involved. Check the ad or agreement to see if it states which services the advertised rate will actually entitle you to. In most cases there will be higher fees for limit orders, options and those trades over the phone with your broker. Also, the advertised commission rate may not apply to
the type of trade you want to execute.

Deposits

You also need to check and see if there is a minimum deposit for the trades that you want to place with that particular broker. Make sure you see how much of an initial deposit the firm requires for opening your account because many companies require high minimum balances.

Some companies will want as much as $10,000 to start. This might be fine for some investors, but many can not afford this high of a deposit.
Have you ever heard the saying “you get what you pay for”? This tends to be the case with online trading as well. The cheap services will get you cheap product. You will likely not have any assistance and customer service might not even be reliable or customer friendly. If you know what you are doing, you might be okay with a broker like this but if you need more help with your trades, you will only be frustrated with cheap online broker services.

Product Selection And Other Extras

When you are looking to select an online broker, pricing is not the only thing you want to consider. Product selection is also very important. Not every broker offers every service and every type of trade. You need to make sure that the broker you are looking to choose offers the types of trades that you want to place.

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