Stock brokers. What are stock brokers? How can a novice trader choose a reliable stock broker?
If you want to manage your investments, the best way to do this today is to buy shares through a broker. When choosing a broker, it is important to take into account the size of commissions, trading platforms, account types, the number of trading instruments and customer service. To help you quickly find a reliable stock broker, we have selected the best stock brokers on the market for you.
What is a stock broker?
When it comes to investing in stocks, you can either buy and sell stocks yourself (self-investing), or you can use an adviser and manage your money for you (managed investing). In the early 19th century, you had to use a licensed professional, known as a stock broker, to make stock trades on your behalf. Thanks to the Internet, investors around the world now invest themselves using an online brokerage account. Today, "stockbroker" is just another name for an online brokerage account.
How do I use a broker to buy shares?
A stock broker is an intermediary between private investors and an exchange. It's been a while since traders had to talk to brokers over the phone to buy and sell stocks. Now you can manage your investments yourself via the Internet. Using a single account, you can buy stocks and bonds, ETFs and mutual Funds, as well as manage your account balances. Stock brokers provide their clients with convenient trading platforms and mobile apps, so you don't need to be a professional to start trading on the stock exchange.
How much money do I need to invest?
You can open an account with most stock brokers without a minimum initial Deposit. But we recommend that you start biddingI buy shares of several thousand dollars or more to ensure a decent income without increasing risks.
How do I choose a stock broker?
There are several important criteria to consider when choosing a broker to trade stocks:
- The reputation of the broker. This is the most important criterion when choosing a broker. The company must provide its services on the market for at least 5 years, have positive feedback from its customers and a good reputation.
- Regulation. To gain access to the stock market, investors need to use the services of a licensed and fully regulated stockbroker – a brokerage firm, dealer, or major Bank. Those, in turn, must have a license from the regulatory authorities. There are a lot of them, in the US it is the securities and exchange Commission (SEC), in the UK-the financial regulatory Authority (FCA), in the EU-the securities and markets Authority (ESMA), and so on.
- Commissions and fees. Depending on the financial instrument, commissions can be fixed – from $ 4 to $ 6 per order execution or in the form of a spread. Some brokers do not charge a Commission for transactions, but receive other benefits – monthly fees, account inactivity fees, withdrawal fees, and so on.
- Leverage and margin. Another important criterion to consider when choosing a broker is to provide additional features to investors, such as leverage. With its help, investors can afford to open positions that are much larger than their own capital. For example, if they are offered a leverage of 1:20 and their capital is $ 1,000, they can open a position of $ 20,000.
- Support service. Customer support is essential for every investor who wants to access the stock market through an online brokeRA. Major stockbrokers offer multilingual support 24 hours a day, 7 days a week, although the markets are open from Monday to Friday.
Which online broker is best for beginners?
We looked at several dozen different stock brokers to find the best ones on the market. The most important criteria for inclusion in the rating were low fees and a wide range of supported account types and tradable assets. Other features reviewed include daily market research reports, tools for investors, educational resource sections, and tools for active trading.
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|Place in the rating||Name of the stock broker|
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