Who is Stock Broker ?
Stockbroker is a type of stock market intermediaries also called a broker, who can buy and sell shares in the stock market on behalf of investors. Stock brokers are registered with exchanges as trading members. An investor cannot directly trade on the stock exchange, they need an expert who can act on their behalf to buy or sell. To fulfill this, a person who is interested in buying or selling has to open a trading account with any stockbroker of their choice.
Stock brokers are generally associated with stockbroking firms, but they can act independently too. For providing their services, stock brokers normally charge some fee, also called brokerage, in normal terms for every transaction, like every buy and sell. Brokerage varies from broker to broker, where one broker charge a flat fee and others broker might charge a percentage of the traded value.
How are they regulated?
Stock brokers are regulated by rules and regulations provided by SEBI. Every stock broker of any type (traditional or discount members) needs to be registered with SEBI and to be a member of stock exchange too.
Services offered by broker :
A stockbroker offers many services to their client, some of them are :
- Gives advice to their client on buying and selling stocks. After thorough research, they advise their clients.
- They manage the portfolios of their clients and provide regular updates to them.
- They inform the clients about new investments.
- They help clients decide on their investment strategies.
Types of Share Market Brokers :
Traditional or full time brokers :
They provide a trading service as well as other services like investment advice, retirement planning, investment portfolio management etc. They charge good amount of commission to their clients given their range of services. Their brokerage is based on the total amount of trades executed by their clients. These kind of brokers go through various training as well as exams to get their job and because of this they have good amount of knowledge related to the stock market, that is why they are very good at their job and gives good return to their clients with very low risk associated with it.
Discount stockbrokers:
They offer their services with nominal or low fee or brokerage as compared to Fill time brokers. Also they don’t provide advisory and research services to the clients.
