The internet usage is rising day by day. In and around the world, the internet has become one of the essential utilities during the day to day lives of the people. With the increase in internet usage, the online trading is coming into existence in the Indian subcontinent. The online trading thereby gives way to the new age ‘discount-brokers.’ They are known to provide the best customer services along with the provision of low prices in India.
Now one might think who exactly are the discount brokers? Well, this is undoubtedly the most common question asked by people. They are the ones who charge comparatively less commissionthan what it is given in the market rules in order to gain attraction from all those investment clients who are currently working with some other firm. This is basically a strategy put forth by the brokers for the improvement of the discount brokerage in India. Having a discount broker will help the people in having low brokerage fees which are required for a number of things likefees for transferring shares to an account, for closing an account, transfer fees, annual charges, etc.
There are a number advantages as well as disadvantages about the discount brokers, and they are:
Advantages:
- A handsome amount can be saved on multiple transactions by the investor. If the trading takes place frequently, then it is possible that the commission paid to the brokers by the investors may add up very quickly, this may lead to lots of transactions.
- People often see the discount brokers that are recommended to people whoare usually big companies which help invest people and trade them on different platforms and earn out of the trades done by the traders.
- Discount brokers also help the traders to carry out trades, but they need a volume so for them the large traders only can be of help. Therefore, they put a few conditions while offering the proposal to the client.
Note:
- In traditional, full-house broking system, one always gets to have a piece of advice from the broker. They get the full inside-out details, the correct and incorrect way of the trade which does not happen in the case of discount brokers.
- One more limitation that is brought out by the discount brokers is that with them, the investor might not be able to trade with more than one company which is not a problem when it comes to full-time brokers.
Therefore, finding the right kind of brokers with low brokerage fees will enhance the chances of having a good trade between the investor and the broker. The new age brokers are coming up with extraordinary stuff that makes trading extremely easy and thereby pushing a lot of people in the stockexchange markets. It also helps to earn more to the trader as well as the broker, but the scheme of low brokerage can be useful in case of a large volume only and not otherwise.
