As an individual, it is important to choose the right stock broker before entering the markets. The stock brokers may be selected only is we are more clear on our own requirements. Different Stock brokers operates in the markets with different USPs. Let us see what are these USPs.
Trading Platform
In the times where days are getting shorter, the online share trading has proven to be an important parameter. People opt for Online platform to not only save their time but also for convenience to operate. Trading terminals have also improved in last few years. Initially, it used to be typical web based html screen that refreshes every few minutes. Then people switched to exe file where an application get installed on computer. This application was not only faster but was equipped with better features. But now brokers have switched to HTML5 version. This has the features of exe software and advantage of logging in directly on net. So no need to carry your PC or laptop every where. Just access the broker website and start trading in an enriched software. These software are responsive which means that it adjusts to the size of the operating device.
Pedigree
The brokers with strong background offer better service mechanism basis their support from their other group companies. Like bank brokers integrate bank account and demat account seamlessly with trading account thus making it a 3 in 1 account which is very user friendly to operate. In companies, where banks offer salary account, brokers offer trading account as value add product at huge discount or free. In case of large brokers, they work out with services like Insurance distribution and mutual funds. Few of the brokers have also became point of presence of National Pension Scheme(NPS).
Leverage
Although brokers can provide max. leverage as per regulatory guidelines but still few brokers have made their niche in high leverage trades. The extra leverage in cash markets or limit against stock are some of the USPs which are very helpful for traders.
Pricing
While service quality and pricing go hand in hand. There are couple of brokers, also called as Full service brokers, which provides value add services like research reports, RM assistance, training programs and thus charge a higher brokerage rates. Another segment of Bank brokers, caters to masses and keep their rates on very higher levels. Again the selling proposition remains the linking with bank account and combo offer with saving bank account. IN last 3-5 years, discount brokers have also come up very speedily. These brokers charges rates which are far lower than any conventional brokers and cuts out all value adds. They provide online trading terminal with trading support. Their charging pattern remains as fixed per trade or fixed rates per month.
Algo trading
Some of the brokers like Zerodha and RKSV also provides terminal where one can try algo trading, also called as system trading. The terminal offers facility to build your own strategy and apply in the live markets. The rates charges for algo trading is same for any normal manual trade.
Service Quality
It is important to understand that the brokers who you are giving your hard earned money, how much it may be relied upon. The complaint statistics on the exchange or Regulator SEBI sites shows that how many complaints are pending against each broker. As such you will understand the quality of services but do not forget that the number of complaints also depend upon the size of broker in terms of number of clients.
Size of a Stock brokers
It is again important to gauge the size of brokers as a large size of clients indicate better service and higher safety. It is more safe to rely on a brokers already large in size or growing to be in business instead of small time brokers which could be fly by night operator. Also large of clients suggest a robust mechanism of execution and service. Large size of broker also ensure the reach at major locations where you may just walkin and get your work done. However, Online clubbed with call center also acts the same way where any issues may be resolved online or over the phone. The payment is done through online bank transfers.
