The Various Types of Share Brokers

A share (or stock) broker is someone who sells or buys various financial instruments, from bonds and derivatives to stocks and shares. Without the aid of a stock broker, it is not possible for anyone to engage in the sale or purchase of any shares or stocks. Stock broker is a term assigned to brokerage firms, their employees and individuals who engage in this activity. The clients of brokerage firms include individuals, companies and institutions. It is always important to work with the Top share broker since they can be sure to have the necessary experience and knowledge to make the best possible investments. It will prove to yield more profits in the long run when a veteran in the field makes investments.

Types of Stock Brokers in India

It is useful to have some background knowledge about the types of stock brokers and exactly what services are offered by them:

1. Discount Stock Brokers:

A recent trend in the Indian markets, discount brokers basically offer only the basic and necessary trading facilities at the lowest possible rates. The brokerage charged is quite low in comparison with the full service share brokers. Discount share brokers do not offer any services like mutual funds, investment in IPO’s, stock research or wealth management services. They generally carry out online share trading with very low charges and only the most basic infrastructure.

You should generally choose to work with a discount broker if you are a day trader who generally never leaves open positions overnight and prefers to leave them open for durations from a couple of minutes to a few hours. Discount brokers charge a flat fee that will not cut into the total amount of profit made. Even in the case where you do not trade regularly but prefer to trade on your own terms and do not require any assistance from the broker, it is easier an option to engage with a discount broker.

2. Full Service Brokers

A full service broker charges higher fees than the discount brokers due to the various other support that is given to the client. This includes personal solutions, analysis and research, trading reports, and professional guidance and assistance on various trades that can be taken. Full service brokers generally have a pan India presence.

It is a good idea to work with a full service broker if you are starting out and need a dedicated relationship manager and guidance in understanding the financial markets. It is also a good idea to engage with a full service broker if you are a swing trader who requires assistance in the form of the superior and curated research reports given by full service brokers. Since full service brokers also offer various other investment options in addition to stock and share trading, they effectively become a one stop solution that meets any and all financial needs of the clients.

Given this background, it is up to you to decide what options to engage with in your journey with the financial markets. However, it is always better to work with the most experienced and best players to ensure a great experience.