Stock Brokerage Firms

By: Eric Morris

Stock brokers play a crucial role in trading of shares at exchanges. Not only can they themselves buy and sell shares on a day-to-day basis; they are also allowed to let others use their accounts for undertaking similar transactions. This facility provided by stock brokers is used by both sub-brokers and small investors. Web-based share trading has further helped multiply transaction volumes at exchanges, in turn pushing their capitalization to stratospheric levels. The growing depth in the stock markets has attracted more capital, helping maintain liquidity in the markets.

Anyone who is looking to invest in the stock markets might well benefit from these brokers. A specific commission is charged by stock brokers for services provided by them to their clients. The chargeable commission rates may vary, depending on the package of services offered by brokers. Some just offer basic transactions to their clients. Others may offer a few services beyond the trading facility, such as contract negotiations. Then there are the big brokering houses, which offer a wide range of value-added services in addition to the basic trading facility.

The type of broker that will really suit your requirements depends on the level of investment you plan to make. If you are a beginner to the stock markets, you may be better off using market intelligence provided by stock brokers. In addition, you can also turn to your broker whenever you need advice. Stock brokers are always there to guide you. You can rely on inputs provided by your stock brokers because, besides the advantage of hands-on experience, they are also well-supported by in-depth market research. Their analysis is very incisive because of their involvement in long-term market trends, in addition to their understanding of possible trends for the near future.

Experienced stock market investors do not need any specialized market intelligence to make decisions, and so they can manage without the help of a big brokering house. In fact, they often prefer to act on their own instincts, rather than on any "expert" advice. Accordingly, they can also save on commissions payable to brokers and improve their profit margins.

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