Online Stock Brokers 

Discount Stock Brokers

You need an online stock brokers to trade shares online. You can still buy and sell stocks by phone or walk to your bank, but who is doing that nowadays. There are different types of brokers available. It's important that you choose the right broker to get the services you look for.

There are four types of brokers: Discount stock brokers with or without assistance, full service brokers and money managers. The differences in fees and performance are quite big.

The online discount broker is the most popular broker type because he offers the cheapest order execution. If you make all your decisions yourself and need no help or advice, then this broker is the best online stock trading broker.

A variation of the online discount broker is when he also offers a basic level of assistance. This service costs an extra small fee when used and can be phone assistance for executing a trade or access to research material like commentaries and research reports, often through third party providers.

If you don't have the time to do your own research then you need either a full service stock broker or a money manager. The money manager makes all decisions for you and just reports to you what he has done while the full service broker will discuss everything with you and you will make the decisions weather to buy a stock or not.

When you have a full service broker then because you need his advice or want his recommendation. The full service broker takes your whole financial situation into consideration, makes investment plans and puts together a stock portfolios.

Until about 1975 there have only been full service brokers with extraordinary fees. They controlled the market. Then the first discount brokers take this market in storm by offering trade executions at low fees. With the advances in computer technology and the Internet the trend continued.

Today an online stock broker offer highly sophisticated software trading platforms where investors from all over the world can get instant order executions at minimal costs. At minimal extra costs the trading software also delivers real time quotes, news and charts right to your desktop. In the beginning there have been many technical problems because of the bad Internet connection and software bugs. Today trading online through these platforms is very reliable and safe. When an error happens all discount brokers offer phone trading capabilities as a backup solution.

No matter which online stock brokers you choose, take care the company is member of the SIPC (Securities Investor Protection Corporation). In this case your account is insured up to $500,000 in the case your broker goes bankrupt.