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It is imperative to understand the difference between a full service broker and a discount broker before you find the best share broker in India. While the former charges you brokerage as a percentage of your trade value, the latter charges you on basis of the number of trades and is much cheaper. If you opt to trade multiple times a month, it is best to go for a discount broker rather than a full service option. However, it is important to consider a few important factors before you choose a discount broker to manage your trading activities.
Here is a list of factors to consider while choosing a discount broker to enable you to deal in stock market:
Reputation of the broker
You may browse through various stock investment websites and search for the best share broker. Research will help you to see if there are any complaints and problems that exist against a broker you choose. You may also browse through their personal work experience with other investors in the market.
Check for two important categories
Fixed price per trade charge: There are brokers who charge fixed price brokerage per trade irrespective to the volume of trade. These are minimal charges.
Fixed monthly fees for unlimited trade: some discount brokers charge fixed monthly fees and offers limitless trading tips in preferred exchanges and sections. Moreover, they also offer competitive unlimited trading plans depending on your service requirements.
Cost effectiveness
A broker will charge different kinds of fees associated with trading. These may include maintenance fee, account opening fee and transaction fee. However, a discount stock broker will charge less transaction fee if you trade frequently and low maintenance fee if you intend to hold stock for a longer period of time. They basically focus on price-per-trade. Also make sure that the commission charge is reasonable.
Investment efficiency
Discount brokers will always suggest stocks on the major exchanges. They are straight forward and will only provide guidance to facilitate a transaction that you wish to make. However, if you feel that your broker compels you to buy shares of their choice and makes unnecessary investment proposition, then you certainly have the wrong broker helping you.
Check your broker’s knowledge
A good broker will always make decisions based on your profile and will then suggests a stock for you. A discount share broker will have to explain the fundamentals of the stock, its valuation, market capitalization, its future prospects and most importantly, the degree of risk and profit prospective. If they fail to explain their actions, ignore such brokers.
Last but not the least; remember to have a broker account especially with those who do not have a physical presence and operate online.