Online Discount Brokers

Looking for online discount brokers? If you are veteran trader and are tired of paying high fees then a discount broker is the smartest way to go. They offer most if not all the services as a full service broker, but a fraction of the cost. Most of the transactions are automated. This cuts down on the overhead. Now on the other hand if you are not an experienced trader and need some hand holding during the emotional ups ans downs then a discount broker is not for you.

How do you find the discount broker that is right for you? This depends on several factors. Do you do all of your own research and analysis or do you the broker to provide it? Do you only care about price? Does the online discount broker offer DAT (Direct Access Trading) for maximum speed?

Research and Analysis

How do you gather and process information. Do you read newspapers, online feeds, inside information? You may want to check out some of the services offered by discount brokers. Many of them offer valuable information for free. Some even provide news, research, and analysis tools. Ameritrade, and Questrade excel in research tools. They are two of the best discount brokers.

Rock Bottom Price

So you do all of your own research. You don’t need any help from your broker at far as analysis. When you start doing research on individual online companies be aware of the wide range of price options within them. A good discount broker will not have any hidden fees. Read the small print or call them up and ask about fee structures. Aside from hidden fees do a price comparison on commission payouts. Make sure it is simple to understand. Complicated commission structures are usually a red flag. Always choose a broker who charges minimum commission without complications.

Speed and Service

The trade speed of discount brokers should also be considered if you are doing day trading. Most online discount brokers offer Direct Access Trading (DAT) facility to have instant access over the market. If you are going to be working outside of business hours then make sure they offer 24 hour service. If you considering a small online broker the make sure they are properly licensed, have a record of solid saving claims, offer volume discounts, rebates and account protection. If you are looking trade in a variety of markets make sure they offer them. Some specialize in certain segments.

While doing your research pick out 5 possible candidates and list the pros and cons along with price. Then do some online research to find out what other customers are saying. Internet forums are great way to get the scoop on discount brokers.