How Full Service Brokers Facilitate Stock Trading?
by Pooja Shetty Financial AdvisorConsider
a situation where you want to buy shares of a company listed on the stock
exchange. Traditionally, traders used to shout trades on the floor, which was
not an organized way to work. Brokerage companies came into existence to
overcome the inefficient way of executing trades on the stock exchange floors.
Over a period of time, these companies offered several other services making it
easier for investors to trade on the stock markets.
If
you want to invest in the stock exchange, you will need the services of a
broker who facilitates buying and selling of shares. Several financial
institutions facilitate trading on the stock exchange and invest in other
securities between buyers and sellers.
Full-service
brokers are also called as advisory brokers. In addition to facilitating
securities trading, they provide several other services as well. Following are
the five services offered by full-service brokerage firms.
1.
Reports
Stock
broking service providers often hire a team of professional experts who study
and analyze the markets. In addition, they track the different companies listed
on the various stock exchanges. Based on their knowledge and analysis, they
offer reports to help you make investment decisions. Some of the reports
available include company-related, industry-specific, and macroeconomic
studies.
2.
Stock
tips
Hundreds
of companies are listed on the numerous stock exchanges. Making the right
investment decisions to maximize your returns is tough. Stock brokers
regularly study various companies and the industries. This enables such service
providers to provide you with stock tips that help you earn good returns on
your investments.
3.
Market
research
Stock
market investing is complex and requires in-depth knowledge and experience.
Most broking companies have an experienced team that conducts detailed research
about the market and listed companies. When you opt to avail services from such
brokers, you will have access to this research. It will help you make an informed
investment decision and reduce your financial risk while earning good returns.
4.
Trading
software
Broking
firms offer user-friendly trading software to help you to execute trades on the
stock markets. These programs are easy to use and efficient. In addition to
providing you with a trading platform, these software programs offer several
other services. You are able to check your position, track your portfolio and
its performance, transfer funds, and do much more through the trading software.
5.
Charts
Professional
experts conduct technical and fundamental research to track the market and
stocks’ performances. They provide different types of charts, such as lines,
graphs, and candlesticks. You may use these charts to make investment
decisions. The broking firms also provide intraday charts, historical low and
high prices, and many other analyses to help you maximize your returns through
stock market investing.
Other
services offered by broking firms
1. In addition to facilitating
investing in shares, broking firms offer several other services. You may invest
in other securities, such as mutual funds, currency derivatives, Initial Public
Offerings (IPOs).
2. Furthermore, several stock
brokers in India offer portfolio management services (PMS). This will help
you track all your investments in different types of securities and financial
products in a single location. Moreover, experienced professionals will analyze
your current financial situation and understand your future goals to make
recommendations. This will help you achieve financial security and earn higher
returns through investing.
3. Several broking companies also
provide Depository Participants (DP) services. These firms participate with
National Securities Depository Limited (NSDL) and Central Depository Services
Limited (CDSL). This allows you to not only execute trades but also settle
these through such depository services.
4. Reliable and reputed broking
companies provide real-time market updates and information. Having quick access
to the important market decisions is crucial as it enables you to make the
right decisions.
5. In addition to investing in the
Indian stock markets, you have access to international markets through broking
companies. This allows you to take advantage of the positive movements in the
global markets.
Brokerage
charges
All
the aforementioned services are available at a cost. The fees paid to the
broking firms are referred to as brokerage charges. These charges are primarily
levied to compensate the brokers when they facilitate trades between buyers and
sellers. Generally, brokerage fees are levied as a percentage of the total
transaction value, a flat fee, or a combination thereof.
You
will pay the brokerage fee when you buy or sell shares through your trading
account. In addition to the basic fees, broking firms may levy other fees for
maintaining a Demat account and annual maintenance charges.
The
brokerage fees vary from one service provider to another. Furthermore, broking companies
may levy different fees for delivery trades and intra-day trades. It is
important that you check the various applicable fees and charges while choosing
the broking company. Checking the terms and conditions and fees levied by
different broking firms online before making a decision is recommended.
By
appointing a full service broker for your trading transactions, you ensure that
you get superior knowledge of the stock market which will translate into higher
returns for your investment. So choose a reliable brokerage company and start
stock trading today.
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Created on Jan 2nd 2018 03:36. Viewed 586 times.