by Today, many people are thinking about additional income. One of the options for such income is earning on the stock exchange. This direction is now becoming especially popular. However, in this environment, an ordinary person cannot do without the services of a brokerage house. In this article, we will talk about how to choose a broker so as not to lose your money.
To begin with, it is important to understand what functions a broker performs and why it is needed at all. A broker is an intermediary between a client and an exchange. It provides the client with a technical, organizational, and legal opportunity to enter the stock exchange and start making transactions on it, i.e. buying or selling stocks, bonds, and other financial assets. By the way, you may also increase your income by playing casino games at https://www.betamo.com/games.
A broker is needed because only professional specialized organizations can operate in the securities and currencies market. Ordinary people (individuals) can buy and sell on the stock exchange only through an intermediary – a broker.
Inside Contents
The main stages of interaction between a broker and a client:
- The broker at the expense of the client, taking into account his orders and his interests, buys or sells shares, bonds, and other financial instruments.
- The broker opens a trading account for each client, from which the player operates on the stock exchange.
- The client, based on his own decision and strategy, submits an order for the purchase or sale of currency, securities (depending on the site on which the auction takes place), and the broker broadcasts this decision directly to the exchange and conducts the transaction.
- The intermediary transfers the received funds to the client’s account, keeping the commission specified in the contract.
- As additional functions, the broker conducts current analytics, gives recommendations to the client on the strategy of behavior on the exchange, and checks the necessary documentation for compliance with legal requirements.
Criteria for choosing a broker
- Reliability. Financial and technological
- Convenience. Convenient interface, interesting analytics. The presence of a bank in the group of companies will allow you to quickly and easily transfer rubles, currency
- Tariff Competitiveness
What to look for in tariffs?
- Monthly payment. It can be either 0 or within 5 dollars if there were transactions on the account. Absent more often on starting tariffs, but there is a higher commission per transaction
- Understanding rates. Often, the exchange commission must be added to the commission for a transaction, the trading mode must be taken into account, etc.
For clarity, we will draw up three portraits of investors in order to assess who and how much will pay per year at different brokers.
Beginning
Minimum investment in the stock market. He saves $200 a month and buys stocks and bonds with it. No complicated tools
Experienced investor
There is already at least $20,000 invested in the stock market. Monthly saves 200-1000 dollars for investments and makes single speculative transactions if interesting options appear.
Professional
Makes transactions for more than $500,000 monthly, and trades intraday. In addition to the stock market, it concludes transactions for the purchase and sale of futures. Uses margin lending.
Starting rates are more or less similar for all brokers. Tariffs with a monthly commission should be avoided (custodian/information services). Then the annual expenses will not exceed $10. It is also worth noting that some brokers give shares and other bonuses to novice investors. This is worth taking advantage of.
Thus, a broker is an important person in trading on the stock exchange, without whose services you will not be able to carry out transactions. Therefore, it is important to choose a good broker who will not only know all the features of trading on the stock exchange but also help you increase your profits.
