Stockbrokers And How To Use Them

To trade on the stock market you must use the services of a certified stockbroker. But they will do much more for you than just execute trades. They will monitor share prices, and advise you on potential gains to be made on positively moving stocks. A stockbroker can offer you a wide range of services and they will charge different fees for these services. There are three basic services that a stockbroker can offer which are trades, stock advice and management of portfolios.


It may be that all you want to do is buy and sell shares so a broker will follow your orders on this. The stockbroker will not offer you any advice with a trade only service and this service is open to experienced traders and newcomers. A small percentage of the total trade amount is usually charged for this most basic of services. Conducting trades is the most popular service offered by a stockbroker.


Offering advice is another popular service. Providing advice is a more costly service as it involves a lot of work from the broker and considerable expertise as you will be advised on stocks that will potentially make you money. The stockbroker will also spend time with you to make sure that you understand everything that is being recommended to you. This is really important if you are a novice in share dealing and the payment will probably consist of a fixed fee plus trade commissions.


Portfolio management comes in two forms which are advisory and discretionary. The difference is that with an advisory service, the broker will create a proposal of stocks that are considered a worthy portfolio but they will not act on this proposal until you instruct them to do so. If you choose a discretionary management option, then your stockbroker will work the portfolio without your input providing you with regular reports on how well the picks are performing.



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