A stockbroker is a middleman with the power to purchase and sell stocks and securities on behalf of investors on a stock market. Stock exchanges are used to trade stocks. An investor, on the other hand, cannot trade directly on stock markets. To purchase or sell a stock on an exchange, you will need the assistance of an intermediary. This intermediary might be a person or a firm authorised to purchase and sell stocks and other securities on your behalf. A stockbroker is such a person or business. Stockbrokers are often employed by a brokerage business, but they can also work independently. The best stock brokers will not charge fee for this service.
The stockbroker provides a service to the investor. A broker’s job is to acquire and sell shares on behalf of a customer. Stockbrokers also play an important role in assisting investors in making sound investment selections. Now that you understand what a stockbroker is and how they are regulated, let’s look at the different sorts of stockbrokers. There are two kinds of stockbrokers based on the services they offer:
- Full-service stockbrokers: Full-service stockbrokers provide their clients with a comprehensive range of services. They are typical brokers that offer trading as well as advice services. As a result, full-service stockbrokers demand large fees, and the brokerage they charge is dependent on the total number of trades made by the customer. Full-service brokerages are well-established businesses with branches around the country. Customers can get assistance and guidance at these locations.
- Discount stockbrokers: Due to the growing usage and availability of the Internet, discount stockbrokers have emerged. These brokers provide their clients an online trading platform. Discount brokers, on the other hand, do not provide advising services or research capabilities. As a result, cheap brokers offer lower charges, which are often flat fees.
All brokerages now provide online services, allowing customers to log in with a username and password and conduct trades. Online best stock brokers services are speedier since transactions may be completed through the Internet, and the broker can also communicate with the customer via chat rooms, emails, and real-time updates.
Understanding what a stockbroker is also means understanding what a sub-broker is. A sub-broker is indeed a person or agency that brokers employ to operate on their behalf. A sub-broker is not a stock exchange member. Sub brokers must register with SEBI in order to conduct securities transactions.