So you’ve done your research, kept track of and analyzed the market, and now you are ready to purchase stock on the stock market. However, you can’t trade anything until you have chosen a suitable stock broker. With the vast number of online stock brokers out there, it can be a little overwhelming choosing one that is right for you. Here are a few factors that you may want to take into consideration.
Pricing is an important factor that you should always be careful to note. Just because a broker offers the lowest commissions doesn’t mean that you are eligible for these prices. The advertised commission cost may only apply to certain types of trades, or it may only be offered for a certain time period, after which the commission cost are higher. Similarly, if you are a beginner investor, the extra cost of a full service broker may be beneficial as you can gain the confidence and certainty of the market.
Financial markets can be volatile and unpredictable, forcing you to be able to act quickly and execute a trade immediately. Therefore, it is vital that you feel comfortable using the broker’s website. Navigate throughout the site during different times of the day, each time noting the speed at which the site loads. If you find that during peak hours the broker’s webpages load slowly, you know that you will not be able to quickly react to changes in the market. Furthermore, if you find the layout of the broker’s site confusing, you may want to look for a broker that offers an easier to navigate environment.
Though you may think that you are only going to trade one type of security, for example stocks, it is a good idea to browse the other services the broker offers. For the most part, brokers offer a variety of financial services that is not limited to stocks, but can include futures, bonds, CDs, and precious metal certificates. Some brokers even offer savings and checking accounts, as well as credit cards that you link with your trading account.
These are only some of the factors you should take into consideration when choosing a broker. This is meant only as a guide to eliminate some of the stress and difficulty in deciding which company you want to handle your trades, and it is important that you do your own research and create your own criteria to choose a broker that best suits your personal needs.