| Online brokerage houses have become popular as a | | | | and bonds, they also offer investment advice and |
| result of the increased number of traders and | | | | can conduct market research for their clients. |
| investors who favor online trading over traditional | | | | Full service firms charge higher fees than discount |
| floor trading. The advantages offered by | | | | companies and are mostly paid by means of |
| Internet-based trading have convinced a lot of | | | | commissions. These firms will charge a client based on |
| traders and investors to conduct businesses online | | | | how often their services are used, regardless of how |
| which effectively leads to increased demand for | | | | good or how bad the client's investment is |
| online brokers. | | | | performing. |
| Pros and cons of using online brokerage houses | | | | Discount broker firms, on the other hand, do not |
| As with online trading, using the services of online | | | | provide research services or offer advice; they just |
| brokers has its own pros and cons. The main | | | | take care of trade transactions in behalf of their |
| advantage, of course, is accessibility. An investor can | | | | clients without getting involved in the decision making |
| easily access his firm anywhere he is and at almost | | | | itself. These types of brokerages charge fixed fees |
| any time of day. The speed of transaction is also a | | | | and rates and earn profits based on the volume of |
| plus when it comes to hiring online brokers. | | | | business they handle. |
| In terms of disadvantages, some market | | | | Selecting the best |
| practitioners believe that online brokerage firms and | | | | In choosing an online brokerage, a trader or investor |
| brokers do not provide the personal service and | | | | should consider the fees charged and whether these |
| attention that a traditional broker can give. Most | | | | rates are commensurate to the services that the |
| investors are also left to their own devices to make | | | | company offers. In addition, the firm should be able |
| all investment decisions without the benefit of talking | | | | to respond quickly to customer queries and offer |
| to a floor broker who can analyze trends with them. | | | | easy-to-understand instructions on how to conduct |
| For an investor who has not mastered the ins and | | | | business with them. A strong reputation and a solid |
| outs of the stock market, this could be a problem. | | | | background are also a must for a stock broker |
| Types of brokerage firms | | | | company. |
| A brokerage company can either provide full service | | | | Online brokerage houses differ in the services they |
| or discount services. A full service company offers | | | | provide and in their payment structure. For your own |
| various financial products and a more extensive list of | | | | good, conduct a research on a company's |
| services compared with discount brokers. Full service | | | | background before making the decision to acquire its |
| firms not only offer financial instruments like stocks | | | | services. |