Day trading is an activity that many people partake in to make more money. However, for those who are new to the game, hiring a professional broker is the best option. The broker who is hired will charge the person commissions or a fee, depending on the type of services that are provided. Understanding the different types of retail brokerage firms will help a person understand the fees they will be expected to pay.
The Full-Service Brokerage
This is considered to be at the top of the ladder. These are the firms that provide people with complete managed funds or investment services. These types of brokerage firms will usually have an entire team of researchers who provide value-added services, including giving trade recommendations and managing money for individuals with a high net worth. The downside to this option is that they charge extremely high fees and usually have an entry requirement to even open an account.
An online brokerage is considered “middle of the road” and usually offers a mix of services that clients are able to pick and choose. An investor who is savvy about the markets will be able to use this type of firm to relay orders, while others may select a full-service recommendation. Most of these firms work entirely online, which means clients receive better value for their money. Keep in mind, these brokerages are going to charge maintenance fees on top of transaction fees.
These are the most affordable firm is the discount brokerage and while they are advertised as being cheap, it is important that traders read all of the fine print. In most cases, these firms don’t offer any type of additional benefits and is used solely for trading.
By understanding the different types of brokerages a person can make a decision based on their investing wants and needs. They can also choose the brokerage option that is best for their specific budget. More information about day trading can be found by taking the time to check out the LinkedIn profile of Markus Heitkoetter, who is a successful trader.