| On both the fronts, the investors and brokers, the | | | | constant endeavor of any broker is to increase the |
| count has increased substantially due to the internet | | | | volume of business. It is natural for one to employ |
| revolution. One sees tremendous boost to online | | | | innovative ideas to promote one's sales. As an |
| trading in shares. The number of listed companies is in | | | | investor you should be in a position to distinguish |
| thousands. The investor has choices but the problem | | | | between the normal sales operations and a 'boiler |
| is in exercising choices. The increase in the number of | | | | room' sales operation. In the former case, your |
| online brokers has created competition in this | | | | broker introduces you to shares of certain companies |
| profession which works out to the advantage of the | | | | which he considers good. In the later case, the tone |
| investors. You find brokers are willing to discount the | | | | of the communication is more persuasive and |
| trades at unbelievingly low prices. In this situation, the | | | | emphatic. These operations are meant to fleece the |
| issue before the investor is to get the finest service | | | | gullible investors by pressurizing them to buy the |
| level without any overpayment. | | | | shares that have little intrinsic merit. Once they |
| To be eligible to do trades as a broker, in the U.S., | | | | persuade the investors to buy in and push the price |
| one must complete two licensing examinations called | | | | of the share up, they sell their position at the |
| Series 7 and series 63. Then one is legally eligible to | | | | opportune time and you are left with the share that |
| solicit business from you, advise you and execute | | | | is worthless. They are experts in subverting the |
| transactions on your behalf. | | | | provisions of law, close down offices and open |
| Notwithstanding this legal eligibility to carry on the | | | | another with a different name and legal entity. |
| trading in shares, an investor needs to know that a | | | | The main criterion for choosing a stock broker |
| broker does business to earn profits. The stock | | | | depends upon the level of services required by you. |
| brokerage house has to maintain an establishment | | | | If you are a passive investor-one who is not willing |
| and bear all the expenses that go with the set up of | | | | to do homework for selecting investments and do |
| a modern office. The broker's job is to carry out | | | | trade-you need to go for a full service share broker. |
| your instructions and do transactions whether they | | | | If you go for long term investment plans, in which |
| end up in profit or loss. He is paid commission for | | | | case the broker has limited role to play, discount |
| each trade. | | | | broker is suitable for you. Take advice from your |
| Life is not easy for brokers as they deal with human | | | | friends and acquaintances as for the suitability of |
| beings who always have expectations of profits | | | | engaging a particular broker. Word-of-mouth |
| from trades. Human tendency is to blame the other | | | | recommendations are more credible than the |
| for one's failures. There are two types of stock | | | | researched findings through the internet etc. |
| brokers. The full service share broker and the | | | | Some day traders set up more than one account, to |
| discount share broker. The former offers you advice | | | | put through their voluminous transactions. If they |
| and hand holding and the later executes your trade | | | | have problems in dealing with the broker for |
| orders and constantly makes efforts to solicit more | | | | whatever reasons they have the backup plan ready. |
| business from you. | | | | Speed is the watchword in day trading, and some |
| Apart from the best credentials of a broker, you as | | | | brokers waive the brokerage if the order takes more |
| an investor need to take the basic precautions that | | | | than 60 seconds to execute. |
| one must take while doing the business. The | | | | |