With the increase of usage of Internet in India, traders are trading online more and also Discount Brokers have introduced a completely new picture of trading. As compared to traditional brokers, discount brokers offer advanced services satisfying need of a smart trader at most competitive price.
Barriers which are imposed by traditional brokers on traders:
1)High brokerage cost
A large sum of money is to be paid as the brokerage for using services of traditional brokers, which if saved can be used by them to further trade in the stock market using that capital.
2)Trading terminal fees
They charge traders annual or monthly basis for using their trading terminals depending upon their policies.
3)High Demat account opening charges
To open the demat account with a traditional broker, traders have to pay more.Because of a burden of these costs often traders fear to trade in stock market.
4)Annual maintenance fees
Almost every full-service broker charges this annual maintenance fees for offering their services to traders.
An additional charge for using software of full-service brokers is to be paid by traders.
How discount brokers have removed these barriers for traders are discussed below:
1)Brokerage is fixed for every executed order
Now traders do not have to worry about their trade size. As discount brokers do not charge on their trade size or trade amount they simply charge a pre-decide flat fee for every executed order which a trader place.
Unlike traditional brokers, no additional pressure is imposed by discount brokers. Often you will witness that full-service brokers force you to buy certain stocks of some company’s time to time. They might be benefited as well if you do so.When you trade with discount brokers this would not be the case.
3)Flexibility to place your order directly from trading platform
With discount brokers, you do not need to make a phone call to your broker every time you need to buy or sell a stock. You can directly access to the market and place your order using the trading platform without wasting much time at your own end.
Usually, every discount brokers will offer you good resources which will help you to know about market updates. All fundamental and technical reports are offered which facilitates you to pick your stocks in a wise manner.
5)No burden of extra charges
No extra cost of maintenance, software, trading terminals is to be paid for using services of discount brokers.
With discount brokers traders can trade with more ease and flexibility in the stock market. Also, the biggest fear of paying huge cost has been removed by discount brokers.Traders must learn how to earn maximum returns from the stock market and also use possible ways to save their money in the market while trading.