Choosing a good broker is one of the most important stages in a trader's work. A broker is an intermediary company between a seller and a buyer. The source of the brokerage firm's earnings is commissions received for completed transactions. There are many brokerage companies now, and each has its own advantages and disadvantages. So what should you pay attention to first of all when concluding a brokerage agreement?
What services will the broker have to pay for?
Each brokerage firm has an established system of tariffs for customer service. In some companies, the commission is taken from the total turnover of completed transactions. And the higher the turnover, the lower the commission.
There are brokers who offer their clients fixed rates or withholding a certain amount from each transaction. This payment system is more beneficial for private traders.
When choosing a company, you should clearly understand how often you intend to conclude deals and what tariff would be more acceptable for you. There is always a lot of information on the brokers' website, which you can read in detail and find a profitable option for yourself.
In addition to transaction fees, brokerage firms charge fees for a number of additional services.
Depository services. The depositary is a professional participant in the financial securities market. Depository services consist primarily in the storage of securities certificates. Payment, as a rule, is charged once a month and ranges from 150-350 rubles. Depending on the rates of the brokerage company.
Margin trading (leveraged trading). All brokers have very different loan rates. Not all securities can be bought using credit. Each company has a list of shares for margin trading, which can be found on the company's website. Each brokerage company has a different list.
Trading terminal services. To make transactions in real time, you need Internet access and special software. Most brokers provide software for their clients for free, although there are exceptions. Some brokerage firms offer both paid and free software.
Cash withdrawal. Many companies issue cash without additional commissions directly at the office of the company, some transfer to the client's bank account. This is a very important point to consider when choosing a broker.
Features of choosing a broker
When working on the securities market, the stability of the trading terminal is very important, which also depends on the broker. The speed of work depends on the load on the server.
You should choose a company whose office is located near your home. There are times when you just need to be in the office often.
When choosing, it is better to give preference to a company with a good reputation and history. You need to ask how long it has been in the brokerage market, how many people it serves, whether there have been any license revocations. It is very important to find out how the broker performed during the crisis years and who is its founder.
In any case, the choice of a broker company is everyone's personal business.
