Importance Of Share Brokers In Real-time Trading

By Author: SamJacob Thomas
Total Articles: 40
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Though for any small sized retail investors, a share broker is just a middleman acting as a link between him and the exchange, a share broker’s identity, purpose and use for an investor far exceeds this common notion. With the advent of online trading and advancement in technology, the digital trading platform provided by the share brokers is one of the most popular mediums used by the masses for their day-to-day trading.

However, there’s more to the story, much more than just a trading platform that’s on the platter for everyone to benefit from. Firstly, share brokers are of various types depending on their functions which are discretionary dealing, advisory dealing and execution only. When the broker estimates the investor's investment objectives and acts on investor's behalf, he’s functioning as a discretionary dealer. When the broker advices the investor about various options but the final decision is made by the client himself, the broker here falls under advisory dealing. The last is the most common sort-after option wherein the broker gets all trading instructions from the investor and is only required ...
... to carry out the investor's instructions which many-a-times is surpassed with the use of trading software given to the clients.

Ideally, one must consider all the functions above before employing the services of a broker and let financial goals, size of investment and availability of time decide. It is important to have a kind of a checklist while choosing a broker. After covering the basics such as being registered with the SEBI, having registered offices, ease of accessibility, one can explore deeper into what else the broker provides. Secondly, the entire offer must be considered as to the percentage of brokerage charged and annual fee, expertise and reputation in the market, availability of latest stock news and research data, trading tools, tips – hourly, weekly, monthly, and so on.

In real time trading, usually people get too involved in just buying and selling looking at the screens while having stock news poured in their ears continuously. Benefits such as research reports and articles provided by the broker, tips and alerts sent to the clients must be heeded. Many brokers even provide information and guidance to other investments like the best mutual funds in India, the various schemes available and related news. Futures & options, derivatives, forex, ETFs, bonds and FDs are also their fields of expertise, which should be banked upon wisely.

Finally, only picking a broker for the sake of having one is not enough. One must check the speed at which the transactions get executed via the broker, the customer care available, fundamental & technical analysis and the exposure to good buys especially those of penny stocks, etc. Good share brokers generally have a lot of clients and hence make a good choice for those who are new to the market.