If you are newbie investor then you might not know much about brokers. There are different kinds of brokers and you can choose as per your preference and needs. You can come across brokers who might be apt for you or not at all worthy. Before you get into details it is better to know what a broker is.
Who is a stockbroker?
A stockbroker is an individual or an organization that is a registered member of the stock exchange and is given license to take part in the securities market in place of its clients. Stockbrokers can directly purchase & sell stocks in the share market on the behalf of their clients and ask for a commission for this service.
Further, there are two kinds of stock brokers in India:
- Full-service brokers or Traditional Broker.
- Discount brokers or Budget brokers or online brokers.
Full-Service Brokers (Traditional Brokers)
These are traditional brokers who cater trading, research, and even advisory facility for stocks, commodities, and even currency. These brokers charge commissions on each trade their clients execute as a percentage of every trade executed. They also enable investing in Forex, Mutual Funds, IPOs, Bonds, FDs, and Insurance.
Discount Brokers (Budget Brokers)
Discount brokers only provide the trading facility for their clients. These professionals do not offer advisory and suits for a ‘do-it-yourself’ kind of clients. They cater low brokerage, high speed and a proper platform for trading in stocks, currency derivatives and commodities. These brokers provide the clients just the platform and do not go into many details. You can find the Best Discount Brokers in India once you explore the options.
How to choose the right ones?
What you can do is you can go through different types of brokers and pick one that suits your needs. Once you know that the things you need are catered by the brokerage company you are talking with, you can sign the projects with them. In case you think you have good knowledge about stock marketing then you should go for discount brokers because they would not give you detailed assistance. On the other hand the full time brokers would keep on calling you, assist you in everything and may do the tasks for you and charge of them which you don’t even need.
Which one should you choose between discount or full time brokers?
The answer relies totally on your knowledge, preference and even time. In case you want stock advisory for your investment, then you should go for a full-time broker. On the other hand, in case you want to do research on your own or you have a financial advisor, and then you must choose a discount broker. The good news is that there are options in brokers in both the avenues.
Thus, it is time that you choose what type of brokers you want for your stock marketing tasks. If you think anyone would do for you then you might be taking the market lightly. If you want pure profits then you have to make all your decisions prudently.