Online Stock Brokers – Advantages and Choices Available

Do you still believe that trading of stocks and other products involves too many phone calls, too much advice and quite some delays in placing and executing orders? Well although that still exists you can trade almost all financial instruments much more speedily, easily and cheaply through ‘online trading’. You can now find a number of online stock brokers who offer generalized and specialized trading services.

There are many advantages of trading through online stock brokers over full-service or traditional brokers. First is reduced trading costs; online stock brokers charge much less than traditional brokers because of their automated trading service which involve least human interfere. Second is speed; usually trades are executed within seconds and placing orders need one or two mouse clicks. Third is accessibility; traders can access there accounts from any where there is internet and/or can trade different markets. Fourth is control; traders have full control over there trades and there is least broker interfere.

There are also some cons. Trading through online stock brokers don’t suit all traders especially who lack trading knowledge and are poor in financial planning and risk management. Second, as the whole trading process is done in broker computers, there can be time delays and inaccessibility problems at times. 

There are many different online brokers for fulfilling different trader needs. There are many full-service brokers who offer online trading access, there are brokers who offer web-based trading access, there are discount online brokers, there are direct access online brokers and there are online day trading brokers. The first and foremost thing to consider when choosing a broker is your trading style.

Online Full-Service brokers: They usually charge higher fees but they offer you trading advice and a whole range of products to trade one. They are good for traders who are not comfortable with their own trading decisions.

Online Discount Stock brokers: They charge discounted commissions but they usually do not help you in analyzing markets and making trading decisions. They simply execute your orders. The commissions they charge differ considerably. Most discount stock brokers offer delayed market access on web based trading pages.

Online Day Trading brokers: They offer direct access (real-time) access to stock markets across the nation on very fast trading platforms. They tend to offer the lowest ever commission rates for active traders. But they also may have higher account requirements and charge inactivity fees on less-active traders.

One can find full-service brokerage firms which offer accounts with discounted commission schedules and online access, can also find discount brokers offering day trading services and/or access to different products and markets. Usually most online stock brokers work exclusively through their website (also may through phone lines) but one can also find brokerage firms which work through nationwide branches.