A stock broker is a professional person who usually associates himself with a broker dealer or a brokerage firm, who sells as well as buys stocks and other securities. They do it from either institutional or retail clients through stock exchange or over the counter in return to earn a commission or a fee. They are popular in the professional designations, it totally depends on the license they hold, the services they provide or the type of stocks and securities they sell.
If someone is thinking about trading stocks and is wanting to find a professional broker there are too many questions he should ask himself before signing an agreement with a broker. Many stock traders team up with a stock broker just because they offer very low commissions or have a brand name. Selecting a broker that can match a person’s trading style and account size can make a huge difference between making money and losing money in the stock market.
Before any normal person start looking for a broker he must ask himself these few questions so that he can identify the trading game plan. Here are list of few question which will help you to find the best broker in the country. They are:-
- How much of a commission will a broker charge? The price rate of a single transaction through an online discount broker can vary from a very small amount to some thousands. It totally depends on the number of shares. Full time brokers may charge a commission of 1% to 2% of the trade or they might charge on a yearly basis.
- How many trades per month can an ordinary investor expect to place? Many brokerage firms charge extra prices if you cannot give a minimum number of trade per month. If you thing these type of extra charges is going to bother you, then you should look for another broker.
- What types of orders should a person purchase? Whether it is a limit, market or on stop? Whenever you choose a broker make sure he gives you the freedom to buy or sell the way you want to do the business. All stock brokers should offer the 3 methods when placing an order.
- Do you get the option of phoning in an order? If you think you are suitable with the option of phoning in an order, so first check this out before you select on a broker. Some online brokers do their business through internet, unless and until there is an emergency when you need to sell an open order.
- What type of accounts can u open? Whether it is cash, registered or a margin? The type of account you want totally depends on you. Because some professional brokers will not handle this kind of registered plans.
- Will a person get selling options against his stocks? If anyone wants to do simple option strategies like covered calls, be sure that your account is set up for it.