What are Discount Brokers?
Discount brokers can be a great way for some consumers to get into and participate in the stock market or the bond market. However, discount brokers are not for everyone. There are severe limitations that come with working with discount brokers and consumers should understand what those limitations are before they sign on with one. This article explores some of the issues that you will face when working through discount brokers. First, it should be understood that there are discount brokers and there are full service brokers. There is a difference between the two. Discount brokers are a fine choice if you want to participate in the stock market but do not need any advice before making your stock picks. Discount brokers do not offer clients any investment advice and do not walk through the process of investing. For this reason, you have to know what you are doing or working with this type of broker can be a big mistake. If you are comfortable doing your own research and making your own
Discount brokers are a great middle point option for people who want to become involved in investing but are wary about taking the step alone. Discount brokers do not offer clients any investment advice and do not walk through the process of investing. But if you know what you are doing, discount brokers will act in your behalf and buy or sell stocks and conduct option trades. Full-service brokers, on the other hand, will advice you on what to buy, when to sell, and how to divide your investment money. Some discount brokers do offer monthly newsletters in which recommendations are printed, but this is not a standard service and should not be expected. Discount brokers offer different services, often depending on how big the local demand and how extensive the competition is. For example, a broker may charge as little as $10 US Dollars (USD) per transaction, or have percentage-based per-transaction charges. When you are researching discount brokers, make sure you ask about additional fee
