Stockbrokers And How To Use Them

It is a requirement that a qualified stockbroker is used to buy and sell shares on the stock market. Stockbrokers can offer a lot more than just trading shares on the market for you. They can track share prices, and provide valuable information on what they believe will be the next batch of movers and shakers in the market. Many different services are available from brokers now and they attract a commission or set fee arrangement. There are three basic services that a stockbroker can offer which are trades, stock advice and management of portfolios.


If all you want to do is trade shares then a stockbroker will execute this for you based on your instructions and make the trade. The buying and selling service is available to novice and experienced traders alike but the broker will not provide any advice here. A small percentage of the total trade amount is usually charged for this most basic of services. The basic service of trading shares on the market on behalf of investors is the most popular use of a stockbroker.


Second to offering basic trades is the provision of advice to investors. As the advice provided by the stockbroker draws on their expertise of the market and involves them in a lot of work to recommend profitable stocks to you a higher fee will be payable. It is also likely that the broker will give up a lot of time to you to confirm that you understand and are comfortable with all the recommendations. This is really important if you are a novice in share dealing and the payment will probably consist of a fixed fee plus trade commissions.


Portfolio management comes in two forms which are advisory and discretionary. If you go for an advisory portfolio service, the stockbroker will create a proposal for you of shares that have a good chance of being in profit for you, then you have to decide what to do. With a discretionary portfolio service, the broker will manage all aspects of the recommended portfolio on your behalf and provide reports on how well this is working for you.



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