Advantage and Disadvantages of Discount Stock Brokers

The primary requirement for trading stocks, bonds, and other commodities is to have an account with a stock brokerage firm. You may save a little bit of money on fees and maintenance charges associated with your stock-brokerage account with one of the many discount stock-brokers available online. Discount stock-broker are an excellent option especially if you are an experienced investor who may not need to take advantage of all of the additional research tools options offered by full-service stock-brokers. Discount stock-brokers can be used to conduct your basic trades on a daily basis while saving you a lot of money.

It should be noted however that not every trader will be best served by the services of discount stock brokers. For the most part discount stock-brokers are the best choice for experienced traders who know how to conduct their own research and market analysis. If you are new to stock trading and are not familiar with all of the intricacies and complex strategies of stock market investing in you should probably stay with using full-service stockbrokers. For those of the trading for few years however, discount stock-brokers may be an excellent choice.

One of the major disadvantages to discount stock-brokers effective for the most part you have no help when you need it. Discount stockbrokers do not offer any type of live person-to-person advice, research, and more comprehensive analysis; in fact most of them offer flat-rate monthly packages and little or no maintenance costs associated with your brokerage account.

This is something that you will need to keep in mind when you are looking into discount stock-brokers. The advantages as well as disadvantages will need to be weighed. Discount stock-brokers have a different amount of experience than other certified financial experts. This lack of training and expertise can at times lead a person to get a stock broker at a discount rate. Several of the trading companies employee these discount-stock brokers in order to act as a middle man for the person wanting to commit the trade. The broker is acting simply on instructions that they are given as to what they are to do with a particular trade.

This is both a curse and a blessing in the fact that you save money while not getting any of the tools that a regular stock broker will give you. Discount-stock brokers are not always a bad thing, many people find that they serve a useful purpose in the fact that they can do the things that need to be done involving a trade without any of the other hassles. If you are new to the markets however, then the use of discount-stock brokers might not be good for you. The use of discount-stock brokers can be a very risky choice unless you are fully prepared to do all the extra work associated with the trade that is normally done by the brokers at a full-service stock brokerage firm.

Source by Jeff C Daniels

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