| If you research about the various investment | | | | (iii) Deep discount brokers: These brokers execute |
| ventures, you would realize that though stock trading | | | | only stock and option trading with fixed commissions |
| is a risky affair, it could be the most profitable | | | | for any trade of any range. |
| business. All you require is to deal in transaction in a | | | | (iv) Computer or electronic brokers: These brokers |
| smart way. For better understanding and a successful | | | | offer almost same services as the previous one. |
| strategy, you would require a stock broker. | | | | Their services are mainly meant for computer users |
| There are three kinds of stock brokers varying upon | | | | who trade via the Internet. |
| their service levels, commissions and their access to | | | | Discount brokers are very popular among small |
| stock information. They are (a) full service brokers, | | | | investors engaged in the stock trade and small |
| (b) direct access brokers, (c) and discount brokers. | | | | traders at commodity exchanges. The small investors |
| Here we shall be discussing about the discount | | | | who are experienced or familiar with the trends of |
| brokers. | | | | the stock market are advised to go for such brokers. |
| A discount broker is a stockbroker who helps in a | | | | In this way, the investors can save a lot commission |
| huge variety of business deals at a reduced | | | | costs. Such investors can easily take apt decisions |
| commission. His services usually cover accepting | | | | based on their own experience, rather than following |
| orders for stock; stock options and; futures trading | | | | a strategy planned by any specialized market |
| deals. He is also termed as discount commodity | | | | intelligence (such as the full-service brokers) that |
| broker, discount stockbroker and discount real estate | | | | charge a high amount of brokerage. It is also advised |
| broker. The word 'discount' is used for such broker | | | | to the beginners in stock trading to hire a stock |
| as they work on discounted brokerage rates. | | | | broker as it would be tough fro them to manage in |
| Such brokers are further divided into four categories: | | | | the market on their own. The reason being that the |
| (i) Full-service brokers: They provide all relevant | | | | stock market functioning is a very complex and |
| services. They have local branch offices that have | | | | unpredictable affair and involves a lot of risk that |
| facilities like personal service, newsletters, personal | | | | may lead you to immense loss. |
| account representative and considerable literature. | | | | As most of the discount brokerage firms don't have |
| (ii) Discount brokers: There services are same like the | | | | local branch offices, it is suggested to check the |
| previous one. There is just a minor difference, i.e., | | | | background and planning strategy of the broker |
| they don't have local branches and have around 1/3rd | | | | before hiring him. Also check whether he is properly |
| the commission rate of a full-service broker. | | | | licensed. |