Advantages And Disadvantages Of Online Brokers

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STOCK ONLINE 101 MODULE 2: FINDING A BROKER As has been discussed in the first module, unless you want to be an independent investor, you will need a broker and an account at a brokerage. This need not be a daunting task. A broker is just a person who will act as a middle man between you and the person who is buying your stock or selling you their stock. For this job, they get a commission. The online broker takes the place of a real person that you would go to see in an office or on the stock trading floor. Due to the fact that this broker works online, he or she will interact with you either over the phone or over the internet. Even though everything is happening online you will use real money to pay for the stocks you buy, and you will get…show more content…
There are a few factors that will influence your decision. How often you intend to trade stock online is one of the factors. If you do not plan to invest frequently, you may want to avoid those brokers that charge a fee for stock trading account inactivity. If you are just starting out and are still unsure about how it works, you may want a brokerage that will offer you a month or two of free service so that you can decide if that service suits you or not. If you require a lot of guidance, you may want a brokerage that offers lots of resources and help whenever it is required. Some of them do not give broker aid. Your initial investment is also a huge factor. Some firms have a minimum amount that you can start with, which may range from $500 to even $2000. If you want extra services, that may restrict the sites that you can use, because some brokerages will let you buy or sell stock only. There are sites that research has shown are popular and work well for new investors who are looking for a brokerage with good reviews, such as SmartMoney and Keynote. Online brokers usually charge per transaction, which is convenient if you want to invest but do not have a lot of money to use for that. You also can be sure that you will get lots of technical support since practically everything happens on the web. A good brokerage will offer you links to other sites that are investment related, which will give you access to excellent information and 3rd party service
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