A simple answer to the high costs contaminating the financial sector is the “discount broker.” The discount broker can be compared to any low-cost airline. Like the low-cost airline’s sole motto is to take the customers to their destination safely, the discount broker aims to carry out your transactions in thebest possible way. The “discounted rates” that are provided by the discount brokers make a huge difference for the customers. They are available on theinternet or can be reached through the newspapers. There are some brokers that give advice or ideas on the newspapers and have a fixed rate.
For a trader, it is much required to have a demat and trading account for trading as well as holding the shares purchased for the long term. As per the SEBI guidelines, it is important for the share traders who want to fetch profit just with trading in the market. There are various options available with a trader to trade in segments as per his choice and capacity to bear the risk as well as investment in the market.
Difference between the traditional broker and discount broker
The main difference between a full-service broker and a discount brokeris contemplated by the options trading or the transaction costs on cost stocks. Most of the brokers charge a low amount for stocks below a threshold price. The chief intention is to guard their brokerage as low priced stock so that it gives them a low brokerage when calculated in terms of percentage. However, in many cases, the brokerage is fixed and can have a great impact on the client’s profitability.
- One of the greatest advantages of consulting discount brokers is that they are unbiased. They do not offer any advice, so there is no chance that they will manipulate you to buy or sell any stock according to their profit. They will not ping you and get you in some deal that you are not interested in.
- The Indian financial market has experienced a lot of change in the past years. With the advent of technology and gaining popularity of electronic trading, transparency in business dealings has been introduced. The cost parameters are not biased,and the opaqueness of the business has been reduced. Internet trading has introduced a set of brokers who offer minimum rates for transactions and are known as discount brokers in the broker’s industry. Thus, discount brokers offer acleartrade.
- The traditional brokers charge high brokerage and may also charge some extra commission or add up some hidden charges that the customer may initially be unaware of. They do sound benign as they are known to advise the customer and help them in making well-search edtransactions; however, many times the customer unknowingly acts as a money minting device for such brokers who influence the customer’s for their good. So, it is better to opt for discount brokers.
However, one must never trust the discount brokers completely and check for any hidden expenses beforehand.