Online stock brokers have helped in raising the whole standard of trading service. Now traders can trade almost all financial instruments from the comfort of their home and with more market information and better tools. There are now a number of online stock brokerage firms available who fit to every trader needs. Some offer generalized services while some others offer specialized services.
Trading through online stock brokers offer many advantages over through traditional or full-service ones. First and foremost advantage is the reduction in trading costs - because of their automated trading procedure online brokers charge much less fee than traditional. Second is the speed of trade execution - online brokerage firms can execute market orders almost instantaneously. Other advantages include better accessibility from anywhere in world, better control over decisions, access to real-time or near real-time market information and news, and lest human interfere with trading procedure. But trading through online stock brokers not suit all types of traders, especially who lack much knowledge. As the whole procedure is managed by computers, inaccessibility problems and system delays can cause problems for traders.
As said earlier there are different types of online stock brokerage firms available to fulfill different trader needs. Below is one reasonable classification.
1. Full-Service online stock brokers - These are firms which offer advice and assistance, and a whole range of products to trade on. But in return of their high personalized service they charge high. They are best suited for traders who need assistance in making decisions and risk management, and are also good for infrequent traders having no time for things like technical analysis.
2. Discount online stock brokers - Greatest advantage with these firms is discounted commissions. They charge much less than full-service firms but they do not offer much trading advice and assistance. Discount brokers are suitable for traders who have good trading knowledge and are able to make their own decisions. There are also some deep-discount brokerage firms who charge amazingly low fees. But never expect personalized services from them because usually they only get your orders executed.
3. Day trading online stock brokers - These firms take trading to the topmost active and automated level. They tend to offer cheapest commission schedules, fastest market access and order execution, systems loaded with a variety of tools, and much more. But they demand traders to fulfill certain account requirements which are usually unattainable for a normal (less active) trader. Day trading services best suited for day traders and scalpers.
Above classification is not a crystal clear one as you can find many full-service brokers charging discount commissions and day trading services, you can also find discount firms offering good assistance and personalized service and can also find day trading firms offering flexible and relaxed account features, broker assisted trades and discount commission schedules.
Online Stock Brokers
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