What a discount broker has to offer in terms of services
Discount broker is a tonic for success due to the high costs plaguing the financial sector. You can compare this broker to a low cost airline. Pretty much on the lines where a low cost airline takes you to your destination, the best discount broker in India provides you with a platform to perform transactions. Of late the commission rates have an important bearing on the profitability of the clients. You can go on to make research calls with news reports and periodicals that are available on the internet. Even newsletters go on to provide you with investing ideas and for this you have to shell out a decent sum of money.
The difference between a full time and a discount broker is reflected in terms of commission structure or options trading. Some brokerage houses go on to levy a charge that is below the transaction fee. In case of options trading most of the brokerage houses have a flat rate per contract. The manner by which you calculate brokerage has an important role in the profitability aspect of the client.
One more major benefit of a discount broker is that they are unbiased. As they are not going to give you any advice they would not be giving you any advice to buy or sell stocks. They would not go on to bother you with research call while even brushing you with recommendations that did not perform well by brushing it under the carpet.
In the last few years the Indian stock markets have had a major transformation. Not only electronic trading has brought along with it a level of trust but it has gone on to reduce the cost. Even it would be fair to say that internet trading has brought about cost and transparency to a new level. At the same time it has brought about a set of brokers who roll out low rates of commission. In industry parameters they are termed as discount brokers.
For each and every bit of transaction that occurs in the market be it commodities or equities you have to shell out commission. Any investor is it a high end investor or individuals have to shell out charge irrespective of the size of the transaction. There are certain type of costs that are statutory that are levied by the government while the second type of cost depends upon the broker. Even the relationship that you go on to enjoy between an investor and a broker is important. Apart from this there are statutory costs that are linked to brokerage. In simple terms higher the level of brokerage higher the charges you have to shell out.
For a client who is a retail one, they are generally not aware of what to buy or what to sell. They go on to depend upon brokerage calls and are willing to shell out money for it. In some cases experts have questioned this legality of such calls.