Finding a Stockbroker

Here are some questions you can ask to help you find the best online stockbroker

There are numerous stockbrokers to choose from these days. While the main focus is on what is it going to cost you to complete a trade there are also a number of other questions you should be asking before you decide which firm to work with.

Some stock brokers cannot deal with registered plans which is a consideration for those who like to trade from their retirement plans. With a bit of searching you should be able to find a stockbroker which will work for you.

man talking on the phone to his stockbroker

Questions you need to ask yourself

Before you begin, you should identify what type of trader you are. For example some of the questions you should ask yourself before you start looking for a broker are:

  1. How many trades per month do I expect to place?
  2. Am I more likely to buy penny stocks or blue chip stocks?
  3. How will I be buying my shares: market, limit or on stop?
  4. Will I need to enter good to closed orders?
  5. Do I want the option of phoning an order in?
  6. What type of accounts (registered, margin) will I be opening?
  7. Will I be buying over the counter stocks?
  8. How much money will I be depositing in this account?
  9. Am I looking for a discount or full service broker?
  10. Will I be using bracket orders?

Questions you need to ask a stockbroker

Things to watch out for when choosing a brokerage firm are:

  1. Is there a surcharges for buying large quantities of shares?
  2. Do I have to pay an extra charge for phone in orders?
  3. Is there a volume discount if I buy a lot of shares?
  4. Do you care about my household income?
  5. What is the minimum account balance you require?
  6. What are your trading fees?

Now that you have a rough idea of what you are looking for, you may want to look at a number of articles which compare the various online brokers. A good summary on US based brokers is published yearly by the American Association of Independent Investors.

Some of the more popular online trading firms are: Scottrade, Fidelity, E*Trade, TDAmeritrade, Charles Schwab, Interactive Brokers and Barclays. Fees range anywhere from $1.00 up to approximately $ 27.00 per trade. This range in stockbroker fees can have a major impact on your trading results.

Once you know what you want in a stockbroker and know what the brokerage firm offers you should be able to choose the firm that will match your trading style.

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