The Indian share market sees many new investors every year. People are now exploring the massive gamut of options that trading offers to earn some money. Nevertheless, trading in the stock market makes no sense if done without an Indian stockbroker. Stockbrokers are professional who execute the buy and sell orders on your behalf. These stockbrokers are registered with SEBI. They hold a membership with stock exchanges such as BSE, NSE, MCX, NCDEX, etc.
However, there are two types of stockbrokers in India. Full-service brokers and Discount broker. Let us understand the difference between the two and why you should opt for a discount broker from the lot.
Full-Service Brokers
Full-service brokers or traditional brokers offer more services than just executing the buy and sell orders. Hence, their brokerage cost is higher as compared to discount brokers.
Discount Brokers
Discount brokers execute orders at a low commission rate. They provide free research and educational tools to assist you in making an informed decision about your trades.
If you are an investor who prefers to go it alone, then you can choose a discount broker. Here we share a few reasons why you may consider a discount broker for trading in the stock market.
Spend Most Of Your Money In Trade Executions
A large per cent of the total amount you pay to a discount broker will be used towards executing trades. This means you will save on the trading fees and effectively use your money towards execution.
Get Quality Execution at Low Price
Discount brokers offer quality services at par with full-service brokers. These brokers also offer quality advice and do not try and sell their additional investment services.
Free Access to Research and Trading Softwares
Discount brokers provide many tools for stock trading and research. They also offer excellent educational materials.
Call On Trade Facility
Many discount brokers offer the call on trade facility for the same price.
Here is how to choose a discount broker in India. Following are the things you need to consider while choosing a discount broker in India.
- Cost offered
While choosing a discount broker, calculate how much each trade will cost you. You can do the calculation with the variety of discount brokers and choose the one which suits your budget. Also, find out if the broker is charging you and charges for streaming data. You can use a brokerage calculator to calculate the brokerage.
- Speedy Execution
Execution is the most critical factor when it comes to choosing a discount broker. Trade execution needs to be timely and fast. It also needs to be at a reasonable price. Hence you need to see how efficient the broker is with the execution of the trades
- Account Opening Charges
Some discount broker will have a minimum fee to open a trading account with them. This will be a one-time fee only.
- Number of Trades Allowed
Some discount brokers may also have a limit on the number of trades you can do in the year. Here you need to see if there is a balance in the number of trades you want to do and the number of trades offered.
- Support
Discount brokers do not provide out and out customer support or trading advice. Hence if you are comfortable operating alone without interruptions, then you can opt for a discount broker.
- Trading tools
You need to check whether the trading and research tools provided are user-friendly. Many discount broker may offer you a free day trial to use the tools and then make a decision.
Many stockbrokers in India are trying to bring in novelty and ease in share market trading. These discount brokers provide you with the best of both worlds — an amalgamation of features of full service as well as a discount broker. Here you get the option to choose unlimited trading plans. These are also zero brokerage plans. This means that you can select a monthly plan and do zero brokerage trading. Such facilities by discount brokers make them a feasible choice if you are a seasoned trader.
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