Who are the different types of stock brokers and what is their role in the stock market?
As many people are paying attention interest in stock trading, Investing in the stock market has become very widespread these days.
It calls for good knowledge of the stock market to take part in it and make profits. Individuals need to learn and understand the market, which many of the people who want to invest do not do due to other work commitments.
This is where a Stock Broker plays a significant role.
Who is a stock broker?
Stock brokers are trading experts who buy and sell stocks, shares and securities on behalf of clients over the counter or through a stock exchange.
Such stock brokers are mostly connected with a stock brokerage firm and they charge a commission or fee from the client for stock broking and managing their stocks.
Such stock brokers have good knowledge of the Indian stock market and keep tabs on the changeable trends and patterns of different stocks and shares.
There are basically two types of stock brokers:
Full-Service Broker: A full-service brokeroffers a broad range of stock and share trading services to the clients together with researching on different stocks and sharesand presenting recommendation on potential profit-making stocks.
Their roles comprise researching the stock market in which the client wants to invest in, study the trend and investigate the different patterns and offer recommendations on which stock the client can invest it and consequently make a profit out of it.
Other than offering advice, they also use their expertise in buying and selling different stocks and shares and stay up to date on the progress taking place in the stock market.
As full-service brokers carry out most of the work for their clients, their brokerage fee or commission is generally high.
Discount Broker: As contrasting to the full-service broker, a discount broker focuses only in executing buying and selling orders for their clients.
They perform the trade by charging a brokerage fee much less than what is paid for their full-service counterparts.
Such discount brokers do not offer any recommendations on the investment nor do they offer any recommendations to their clients.