You need a broker to trade on the stock market. Brokers are registered with the Securities and Exchange Board of India (SEBI) and act as an intermediary between you and the stock market.
Discount brokers offer online trading platforms and allow you to trade at lower brokerage charges. Compared to full-service brokers, the former types charge significantly lower brokerage charges.
Reasons for choosing a discount broker
If you are still not working with a discount broker, it is never too late to move. Switching brokers is not very difficult and here is why you must choose a discount broker:
Spend more money on trade execution
According to a study, almost 50% of the stock market clients work with full-service brokerage companies that charge a percent on executed trades. As a result, the brokerage paid increases as the number of trades and volumes rise.
Discount brokers have centralized operations and offer services via an online platform, which reduces their overheads. The lower operational expenses result in lower brokerage for clients. This leaves you with more investible surplus that helps spend more on the trade thereby giving you the opportunity of earning higher profits.
Does not compromise on the quality of execution
It is a common misconception that a discount broker may compromise on the quality of services. You may also think that unlike full-service brokers, discount brokers may not provide investment research and advisory. However, a reputed and reliable discount broker provides excellent services without compromising on the quality of trade executions.
Access to online trading tools
Discount brokers use advanced technology to offer services to their clients. Additionally, they provide access to various online tools through trading platforms and mobile apps allowing you to trade from any place at any time. These types of brokers also use high-end analytical tools and an experienced research team to offer superior advisory services. In case of any issues, the customer care executives ensure quick resolution of your problems. You may also resolve issues through phone support, live chats, and mail services.
Things to keep in mind when choosing a discount broker
With a large number of discount brokers, choosing the right service provider may be tough. Here are some things you should keep in mind when choosing the right discount broker:
The brokers levy opening charges, annual maintenance charges, and brokerage fees. It is recommended you clearly understand all these various expenses. Additionally, ensure there are no hidden costs by going through the details thoroughly.
Minimum number of trade requirements
Brokers charge brokerage on every trade, which is their primary source of earnings. However, it is very important to ensure the service provider does not have any minimum number of trade requirements. Moreover, if you do not meet these minimum requirements, ensure there is no penalty.
When looking for a broker, do not focus only on brand names. Take your time to research different service providers and read reviews and recommendations available online. One such provider is mastertrust that offers affordable brokerage rates for trades executed on its mastermobile app.