On the brokerage platform, both sellers and traders can get linked to buy or sell stocks. The service is provided by financial institution termed as a brokerage firm. In order to perform any trading, you may need two basic components – buyer and seller. Within the financial institution, a buyer is a person who wants to hold the stock for long-term, while the seller is a person who wants to hold his stock for a very short term.
On different financial securities, the brokerage act will enable both buyers and sellers to perform the trade. This firm acts as an intermediary between the two. When performing this act, the firm is paid a small amount of compensation fee. The fee is generally paid, only after the completion of trading. Brokers are two types:-
When speaking of traditional brokers, these are also the one who will offer you with complete service. They have bee linked with the trading system and stock market for many years. They may offer you with multiple services, apart from only acting as an in-between agent. They will help you with multiple tasks along with completing trading of your stocks.
When you approach any traditional broker, he will be responsible for performing a complete research of the market trend on your behalf. Once the research has been completed they will provide you with a complete list of best-performing trades and stock in the market. They will also recommend clients the names of stocks in which it is profitable to invest. They will at times also try and provide you with loan amount for investing in the market for purchasing stocks. You may have to fulfill certain terms and conditions.
These are also termed as online brokers. You can find many discount brokers India who are available for a much lower price as compared to traditional brokers. They help their clients perform trade via online trading platforms. The system they offer with is fully computerized and automated. The software helps in making all possible predictions based on worked out algorithms.
Another benefit of hiring discount brokers is that they will offer you with assistance for executing your trades few times within 24 hours. In general, the first trade is performed at a particular time of the day, by multiple traders who are small and big investors.
So how are discount brokers better options?
- One main benefit is that these brokers will only provide you a chance to perform trades. No recommendations are given by them for trading. The process involves a very small amount of fee in exchange.
- If you are using the services of a discount broker, then you get to save a big amount of money which otherwise you would have to pay a fee to the traditional broker. This means that you always have extra money to invest in trading. In long term, you can generate best returns.
- You may not have to hold your stocks for a long time with an aim to earn big money. You can perform multiple numbers of small trades to earn the same amount.