| Stock brokers are those who are authorised to | | | | individuals who trade on behalf of their |
| trade securities in a stock exchange of which | | | | clients. The online stock brokers provide |
| they are members. Any investor interested in | | | | their clients with lot of data, information, |
| buying or selling a stock has to approach a | | | | researched and expert opinions on which |
| stock broker. In the initial days, stocks | | | | stocks to purchase and sell. They send |
| were traded by stock brokers by shouting the | | | | frequent newsletters on the happenings in the |
| price of the stock on the floor of the stock | | | | market, information about IPOs, mutual funds |
| exchange. This method was called open outcry | | | | and NFOs. |
| method of trading. At that time, shares were | | | | |
| in physical paper format. This used to be a | | | | An individual cannot go directly into any |
| very time taking, cumbersome and risky | | | | exchange and trade in securities. Therefore |
| process. The stock market trading was largely | | | | he needs a stock broker for him to transact. |
| limited to professionals, stock brokers and | | | | An individual before selecting an online |
| some enterprising individuals. | | | | stock broker should take the following |
| | | | factors into consideration: The track record |
| However, with the advent of electronic | | | | and financial status of the broker over the |
| trading after the shares were dematerialised | | | | years, the swiftness of the web site in |
| in 1993, the constraint of being at the same | | | | responding to the queries, the rates and |
| place to trade has gone. It is during this | | | | commissions charged by the broker in |
| time that a scam broke out in the country by | | | | comparison with others, the services offered |
| a stock broker. Online connectivity has | | | | depending on our requirement and level of |
| helped stock brokers to trade from any part | | | | expertise and the authenticity of the |
| of the country. The masses started actively | | | | website. |
| participating in the securities trading since | | | | |
| then. | | | | The advent of online stock brokers has made |
| | | | it easy for the retail investor to |
| Lately, the stock exchanges prefer corporate | | | | participate and invest in securities. The |
| with good track record as stock brokers to | | | | online brokerage firms offer customer care |
| individuals. Guidelines were laid out for | | | | branches and personalised service. All the |
| selection of an individual or corporate as a | | | | stock brokers are also registered with SEBI, |
| member broker. Net worth, education and | | | | Securities and Exchange Board of India. SEBI |
| experience of the applicant are taken as | | | | acts as a watchdog for investors and ensures |
| criteria. The selected member broker has to | | | | that the rules are followed. |
| pay a security deposit and also an annual | | | | |
| membership fees. | | | | These online brokers operate by using the |
| | | | computer terminal in their office or |
| A stock broker may operate on behalf of his | | | | premises. The online stock brokers also |
| client for a commission or even trade in | | | | manage the portfolio of their clients based |
| securities for his own self. Normally shares | | | | on their financial status, risk appetite and |
| are traded in two methods. One is cash | | | | future goals. However, no online stock broker |
| trading and other one is day trading. In cash | | | | takes the responsibility for any loss |
| trading the shares are purchased or sold with | | | | incurred by the client by following their |
| an intention to deliver or keep the | | | | advice. There may be some stock brokers who |
| possession of the share and the value of the | | | | are not qualified or not registered but still |
| share has to be delivered on or before the | | | | operating in the market. They may mislead |
| settlement day. Therefore they need to be | | | | you. |
| delivered on or before the settlement day. | | | | |
| Where as in day trading method the shares are | | | | Therefore it is imperative for the individual |
| purchased and sold within the day and thereby | | | | to consistently monitor the stock market, |
| squaring off their transaction. | | | | track the performance of his stocks, set some |
| | | | targets for the returns and set a loss |
| Online stock brokers are mainly corporate or | | | | control limit to complete a great portfolio. |