Different Types of Online Stock Brokers Available
By: Praveen Ortec
Online trading of stocks and similar products helped almost all types of traders. Online trading involves much less trading costs than traditional methods, is fast and traders can use much better tools. There are many different types of online stock brokers now available and traders can easily choose the broker who best suits him. Below is a classification of online stock brokers. Remember this is not a well-defined classification but it can be effective.
Full-Service Online Stock Brokerage Firms These are very big firms; most of them are traditional brokerage firms offering online trading access. They provide both trading assistance and advice. They are known for their superior customer support and trading and market knowledge. But the charges are fairly high; usually around $100. This make them less favorable for experienced traders who can make their own trading decisions. But full-service online stock brokers are good choice for traders who lack trading knowledge and time, who trade for long-term profits and who are not much good in financial planning. Remember full-service brokerage firms help traders tremendously in managing their total portfolio. They also offer a range of products to trade/invest including stocks, bonds, funds, notes, futures and options.
Discount Online Stock Brokerage Firms They solve your high-commission problems. Discount brokerage firms charge lesser commissions for executing trades; usually around $10 per trade. Most of them also offer a range of products and markets to choose from. But you cant expect same level of customer support and trading assistance. They are best suited for experience traders/investors who can make their own trading decisions based on the tools and data provided by the brokerage firm over internet.
Online Day Trading Stock Brokerage Firms These are the firms with high-level of automation of trading procedure. They hardly help the trader in technical analysis or trading decisions but they provide some very powerful tools and charge least commission charges. The commission charges are usually below $10 for stock trades. They provide direct access (real-time access) to markets and offer installable trading platforms with charts and technical analysis tools. Day trading brokerage firms best suit day traders, scalpers and other traders who are actively buying and selling stocks.
Deep Discount Brokerage Firms They charge lowest commission schedules by high degree of automation of trading procedure. They are not so popular for their customer service, but there are also some names which stands out. They usually work through a centralized location; not through nationwide branches. Deep discount broker usually specializes in one or two products (stocks, bonds, funds, etc). They are not much favorable for traders lacking good trading experience and knowledge.
Specialized Brokerage Firms These are brokers who specialized on one or more products and can offer many advantages for traders trading that product. They are of all types discount, deep discount and day trading. They are very good option if you are planning to trade single products or markets.
One can often find brokers who fit to more than one category. Fore example there are full-service brokers who offer discount commission schedules if the trade fulfills certain requirements and you can also find discount and deep-discount brokerage firms which offer good trading assistance and customer support. What ever be the type of broker you choose, it must suit your trading style, profit goals and risk-tolerance. You do not want to trade with a day trading broker if you are planning of long-term investments and similarly you do not want to trade with a full-service brokerage firm if you are going to actively manage your trades.
NobleTrading is an online stock trading broker offering discount commission structures and a variety of account features. Get quality trading education from their daily updated blogs. NobleTrading also offer online OTCBB stock brokerage services.
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