An Overview of Stock Broking in India

Investing in stocks has now become a feasible option for anyone and everyone who wishes to do so due to the presence of discount brokers as well as online trading. The elimination of the previously present high charges of brokers has made the entire process more accessible. Demat accounts also make it possible to execute the transactions faster and keep all investments in a single place that is secure. In this climate, people generally prefer to do their trades through a discount broker. While doing so, it is generally advisable to have basic knowledge about their business model.
Discount brokers generally provide only basic trading facilities and no other services. This includes advice on the trades and investments you choose to make. Traditional investment advisers and brokers were bound by certain fiduciary responsibilities which bound them to watch your back and ensure that they make recommendations based on your own goals and risk tolerance. However, with a discount broker, none of this exists and if you choose to invest in a high risk and volatile stock, then they will not advise you of the risk you have chosen to take. You’re on your own with them and have to do your own research.

Discount brokers, in continuance, may also not warn you of the consequences of choosing to trade with options, bonds or other products considering the lack of experience on your part. They would be happy with you trying out new options since these products generally come with higher commissions and the more trading you do, the better off your discount broker is. Hence, it is a good idea to begin investing real money in these products only after gaining proper experience through paper trading.

Moreover, it would be a huge mistake to assume that all discount brokers are the same in terms of the services they offer. There are many people who do not really want much human contact and for whom the cheapest discount brokers work best. However, if you are someone who would occasionally desire stopping by a branch office and engaging in a market discussion, then it is better to pay a little more per trade and engage the services of such a broker.

It is also a myth that discount brokers are for only people who wish to make a quick fortune with very small balances and net worth. The basic truth is that no matter how much money you have, the trades happen at the same stock market. If you have the required experience and knowledge, then it is generally a better idea to manage your money and investments yourself. In this case, engaging with a discount broker who carries out your trades at low or zero brokerage charges is a much better option than paying a higher commission per trade with a full service broker whose advise you wouldn’t have much need for anyway.

Hence, if you have the knowledge and experience to manage your money wisely or are starting out and are interested in getting the feels, start investing with one of the Top 10 Stock Brokers in India.
Share on Google Plus

About Lokesh kumar

I am professional blogger share guide about WordPress, blogging tutorial, seo techniques, making money from blog and getting traffic to the blog.