| What is a brokerage firm? A brokerage firm is a | | | | commission costs than full service brokerage firms. |
| company that has the required legal permissions to | | | | An introducing brokerage firm is one that specializes |
| indulge in the trading of securities. It also provides | | | | in futures markets and buy or sell orders on |
| analysis and advisory services to clients. | | | | commodities exchanges through established firms |
| Who are employed in a brokerage firm? | | | | that are clearing members of exchanges. |
| A brokerage firm hires traders and research analysts | | | | What are the licenses that a broker from any |
| to work for them. Traders are authorized to sell | | | | brokerage firm needs to have? |
| securities on behalf of the firm and its customers. | | | | The licensing and training requirement for futures |
| Research analysts? research stocks track companies | | | | brokers is different from that needed for licensed |
| and provide advice on whether to buy, hold or sell a | | | | stockbrokers. A futures broker needs to have a |
| particular stock. Most brokerage firms are publicly | | | | Series 3 license, while a Series 7 license is essential |
| traded companies that also trade securities for their | | | | for a stockbroker. There are many brokers that |
| own profits. | | | | have dual license so that they can deal in both |
| How does a brokerage firm make money? | | | | markets. |
| A brokerage firm sells its knowledge and expertise of | | | | What are the factors to keep in mind before hiring a |
| the securities markets to its clients. They charge | | | | brokerage firm? |
| fees for acting as an intermediately between the | | | | One must ensure that the brokerage firm they hire |
| buyers and sellers of securities. They also make | | | | has all the right licenses for trading in stocks and |
| money through proprietary trading. | | | | bonds and have the necessary clearance certificates. |
| What are the different types of brokerage firms? | | | | Those that want to trade directly using the Internet |
| There are three main types of brokerage firms. | | | | also need to find out whether the systems at the |
| Full service brokerage firm offers advice on | | | | brokerage firms comply with current standards. One |
| investment strategies, research and news. Since | | | | needs to be sure of the costs and fees, including any |
| these firms offer multiple services, their fees are also | | | | hidden costs of dealing with the particular brokerage |
| higher. | | | | firm. One also needs to find out the minimum account |
| Discount brokerage firm is ideal for someone who is | | | | size that the firm accepts, the performance bond |
| an experienced trader who makes his or her own | | | | requirements, the handling of dispute orders and the |
| decisions. Discount brokerage firms have lower | | | | track record of the firm. |