A lot of people like to dabble in the stock market to make some extra money. To realize your objective, it makes sense to go in for a cheap stock broker. A cheap stock broker is one who charges relatively low commissions on the buying and selling of shares. This is important as you will often trade in a certain quantum of stocks. Additionally, there is also the fact that the commission has to be paid at the time of both buying and selling the same stock. A simple calculation will reveal why it makes perfect sense to go in for a cheap stock broker!

Now how do we distinguish a cheap or discount stock broker from one who provides full-service. Typically, a full-service broker is one who will provide a wide gamut of financial products such as stocks, annuities, insurance, bonds and derivatives. In addition to the products, such brokers also offer advice on investment options to customers. In lieu for their extensive services, full-service brokers usually charge higher fees. Now it is important to understand that these full-service brokers get paid commissions based on the stock activity that takes place. So it is in their best interest to make you trade on an active basis which would enable them to earn higher commissions.

In contrast to these full-service brokers, you have the cheap stock broker. The latter will only facilitate in trading your stocks. They usually don’t offer specialized advice to customers on how to build their portfolio. Since they a limited scope of products and services, they also charge less fess from the customers. They don’t make money through commissions. The cheap stock brokers earn money by having a large network of customers on the basis of their attractive prices and customer service. The best thing you can do is go for a cheap online stock broker.

The next question that arises is how to search for a cheap stock broker. You can interact with a stock broker by visiting him/her physically or connecting via the phone. However, those will, again, cost you more money. Well, there are many online brokers who provide such services at lesser rates. Some prominent ones are TradeKing, Zecco, OptionsHouse and Scottrade. Of these, Zecco offers a certain number of free trades if you maintain a certain minimum monthly balance with them or trade frequently. So, if you are an active player, this means a win-win situation for you. TradeKing offers a low rate on every stock trade that you do. They are known for their customer service and the range of tools they provide.

The essential things to know before deciding on a cheap stock broker are reliability, knowledge and service. You should feel safe in the knowledge that your stock broker is working in your best interests and not taking you for a ride. The other thing is that you need to make sure you can reach out to your broker on the phone if you are unable to use the online platform to see the share movement or make a transaction. Hence, make sure that your stock broker is known to provide reasonably good customer service. These are some key things to bear in mind while looking for a cheap stock broker.

Author Bio: Come visit Davids latest website that discusses online share market products such as the best internet stock broker and some tips to find the best cheap stock broker that every person needs to explore before heading into share trading.

Category: Finances
Keywords: