Discount Brokerage Firms

Stock brokers offer varying ranges of services toup to 50% of commissions charged by the
their clients; accordingly their chargeable commissionfull-service brokers; the latter boast concessions as
rates differ. While many brokers provide a smatteringhigh as 90%. No wonder small investors usually fall to
of value-added services to their clients - includingthese tempting offers.
market research input and analysis - other brokerageThose small investors who are fairly familiar with the
firms' offerings are relatively modest. In stockfunctioning of the markets can save a lot on payable
market jargon, these much more basic firms arecommissions by opting for discount brokers. These
called discount brokers.investors would make their trading decisions on the
Because discount brokerage firms provide fewbasis of their own experience, rather than on any
services beyond executing trade deals for theirspecialized market intelligence - intelligence for which
clients, the commissions charged by these brokersthe full-service brokers charge handsomely.
are relatively low. They are very popular with smallNevertheless, it is generally advised that new
investors in the stock markets. Discount brokers areentrants in the markets cannot do without the
also preferred by small traders at commoditysupport of specialized market intelligence. The
exchanges.functioning of the markets is very complex and
There are two basic types of discount brokersunpredictable, and involved risks may cause an
operating in the stock markets: standard discountersadventurous stock market greenhorn big financial
and deep discounters. The former offer discounts oflosses.