| The widespread popularity of online trading among all | | | | 5. Funds trading brokers - includes brokerage firms |
| types of traders have given rise to a variety of | | | | which offer traders access to many mutual funds, |
| brokerage firms. Today traders can trade almost all | | | | treasury notes, bonds and Exchange Traded Funds. |
| financial instruments including stocks, bonds, | | | | But the above classification, other than forex and |
| commodity futures, options, funds, currencies, and | | | | futures brokers, is not a clear one as most brokers |
| much more online, from the comfort of their own | | | | allow traders to trade many products and markets. |
| home. Online trading brokers offered much fast order | | | | One other popular way of classification of online |
| execution for less charges and made available a | | | | trading brokers is according to their trading service(s). |
| range of trading tools which once were available to | | | | |
| only institutional and large scale traders. There are | | | | 1. Online full-service brokers - these are traditional |
| many different kinds of classifications of online | | | | brokerage firms which start offering online trading |
| trading brokers, here are some important ones. | | | | services. They allow traders to trade a vast variety |
| Classification based on products is the one of the | | | | of products and markets; offers more order types, |
| most popular. Here brokers are classify according to | | | | and plenty of trading services. In return, they charge |
| the access to products they are providing. They | | | | often high but they are well-informed of market |
| include | | | | movements and are very good in customer support. |
| | | | 2. Discount brokers - they usually offer the same |
| 1. Stock trading brokerage firms - brokers whose | | | | number of services as full-service brokers for a |
| main service is to trade equities. Most brokers you | | | | remarkably low charge. They highly automate their |
| heard about are primarily stock brokers. | | | | trading services. But one can never expect the same |
| 2. Forex trading brokerage firms - these are brokers | | | | level of market knowledge, trading assistance and |
| who offer traders access to the worlds biggest | | | | customer support from them. |
| financial market, forex currency trading market. Forex | | | | 3. Deep discount brokers - they tend to offer lowest |
| brokers tend to differ from others, as they do not | | | | commissions but almost fully automating the trading |
| charge any straight commissions, instead they profit | | | | procedure, even customer support. Often the traders |
| from spreads between ask and bid price for a | | | | will be limited with the number of markets and |
| currency pair. | | | | products they can trade. |
| 3. Futures trading brokerage firms - these brokerage | | | | 4. Day trading brokers - also known as direct access |
| firms which allow traders to trade commodity | | | | brokers, they provide traders real-time access to |
| futures. They can be of many subclasses of brokers | | | | markets. Products and markets can be limited but |
| who specialize in equity futures, currency futures, | | | | they offer some of the most powerful trading |
| financial futures, energy futures, commodity futures, | | | | systems which tremendously help in active trading. |
| etc. | | | | To find the broker who best suit one, he/she must |
| 4. Options trading brokerage firms - these are | | | | consider many factors which include trading style, |
| brokers whose primary trading service is for options, | | | | products/markets, profit goals, risk-tolerance, |
| an interesting instrument having different underlyings | | | | commissions payable, order types, account |
| such as stocks, futures, funds, bonds or currencies | | | | specifications, past performances, accessibility, |
| which offer a traders a option to buy/sell or not to | | | | platform, and much more. |
| buy/sell the underlyings at a future time. | | | | |