If speaking of stock marketing, investing, buying and so on; there are different types of things that have to be kept in mind. Most of the individuals take assistance of professional brokers when they step into stock marketing. These brokers are the middlemen when talking about purchasing and vending stocks. These professionals handle your orders to sell or purchase a particular stock.
There are mainly two kinds of brokers Discount brokers and fulltime brokers. The former brokers fetch you all the information and give you exact guidance that too without any additional charges. However, speaking of the latter one, they facilitate things for investors and might charge investors for even the things that investors weren’t needed. Anyhow, it is the personal choice of investors whether they want to go for Discount Brokers India or fulltime brokers.
These are the brokers that cater a platform for transaction and the services that are essential to complete a transaction. The alteration between a discount one and a full-service broker is reproduced by the transaction cost on low-cost stocks or on the substitutes trading. There are various brokerages who charge a least amount for stocks below a specific price. Their aim is to guard their brokerage in absolute terms as low-priced stock could give them small brokerage if they get calculated in the terms of percentage. Similarly, in the realm of options trading (that are usually low-priced, mainly out of cash options) different brokerages have a flat quantity per contract. This is a technique of calculating brokerage that has a massive impact on the profitability of client.
Once more benefit of a discount fellow agent is that they are impartial. Yes, it is because they cater no advice. They are not going to make you vend a good stock or at the same time, make you buy one. They are not going to trouble you with their research calls and remind you about that of all the trading calls that clicked while conveniently brushing recommendations under the carpet that did not perform.
It is important for you to know that Indian financial markets have undergone a drastic change for the good over past decade. Electronic trading has not just got transparency in a business that was infamous for opacity but it has also brought down prices. Web trading has raised the transparency and payment parameters to a completely new level. Internet trading has also fetch in a set of brokers who offer cheap rates for transactions. These are the fellows who are known as discount agents or brokers in industry parlance.
Charges: what are they for?
A broker charges brokerage for offering a platform to transact. The conventional brokers charge higher brokerage simply as they claim to offer value addition by catering research calls. Though a conventional broker could sound kind by claiming that his well-researched calls are produced by a huge team of highly educated and more importantly highly paid analysts with sole goal of helping client increase wealth, the truth is quite different. A broker makes money only in case any client transacts. And the more a client manages, the better brokerage goes to the fund of the brokers. Brokers generally have differing rates of brokerage that rely on the client and quantum of trading.
Conclusion
So, after reading it all you might have made up your mind regarding discount or fulltime brokers.