Online Stock Brokers

The advent of Internet technologies has led to something of a worldwide revolution over the last decade or so, impacting on virtually every area of our lives to change the way we work. When it comes to stock trading and investing, this is never more evident, with vast changes in working practices brought about as a result of the rapid development of web-based technologies and trading platforms.

In the recent past, it was the norm for most investors to trade through a 'live' brokerage firm, communicating usually by phone to execute particular trades. This meant high trading costs, a lack of efficiency and immediacy, and a dependency on paper-based certificates to represent the limited portfolio of asset classes open to the 'average investor'.

Now, the very same average investor can get involved with nothing more than an online trading account and a few mouse clicks, opening up a wider serious of tradable instruments and markets and circumventing the need to deal with the middle-man.

But with added choice comes added confusion. Finding a good fit with a broker isn't always a straightforward process, particularly when there are so many competing firms all shouting different things at once. This brief guide is designed to help clear up the process of choosing a broker, and make more evident the factors you need to take into consideration when choosing the right online stockbroker for you.

Here is a selection of just a few of the issues you will need to consider when choosing a stockbroker to meet your needs:

• Are you comfortable with executing trades via an online interface, and does your current computer hardware support the needs of online trading platforms? Assuming you don't wish to speak to a person to execute your trade, there are a number of online brokers that offer low-cost, 'virtual-only' trading services, where all transactions are handled through their automated trading system, at little more than a couple of dollars per transaction.
• How many transactions do you expect to make? The number of transactions you execute will go a long way towards determining the costs of your trading overall, and many firms offer price breaks and special discounts for traders. So, for example, day traders might need to look for volume savings, whereas less frequent traders might be better positioned with a service with more in the analytical data and resources section to better inform decision making.
• Are you looking for 'execution only' services, or are you looking for someone to manage your capital or advise on the best shares in which to invest. Obviously, the less input required from the broker, the less the costs associated with each transaction will be.